Intelligent gift planning combines charitable intent with cost-efficient planning techniques. While most charitable gifts are made in cash, other non-cash gifts often provide significant benefits to the donor. It can be extremely important to consider the kind of asset used to fund a charitable gift. Click the following links for ways you can maximize your charitable giving.
Immediate gifts to Mid-America are just as the name implies: gifts that are given to Mid-America now. Immediate gifts can include the following and should be addressed to:
Mid-America Reformed Seminary
229 Seminary Drive
Dyer, IN 46311
A monetary gift is the most popular and simple type of charitable gift. This type of gift is generally tax deductible if you itemize your deductions on your tax return making the actual cost to you less than the gift itself. Cash gifts are fully deductible up to fifty percent of your adjusted gross income. Any excess of the fifty percent deduction rule can be carried forward for up to five additional years.
Mid-America is able to accept credit or debit card payments for cash gifts. If you wish to make a regular donation to Mid-America you can simplify the process by authorizing automatic payments from the checking or savings account of your choice. To initiate automatic payments you much submit a Debit Authorization Form to Mid-America.
Long-term appreciated assets usually generate the most favorable tax benefits for a charitable gift. This could be stocks, bonds, or any kind of real property.
Imagine you have an asset that has appreciated significantly over a long period of time. This could be stocks or bonds, a mutual fund, a vacation home, or any other asset you own. When you sell that appreciated asset you will be required to pay tax on the appreciated amount – or capital gain. Presently that amounts to 15% or 20% depending on your annual income.
Let’s say you purchased 1,000 shares of XYZ stock several years ago at $15 per share ($15,000). Today that stock is worth $25 per share ($25,000). If you sell all your shares your capital gain will be $10,000. At a 15% tax rate you will owe $1,500 in tax on the sale of that stock. Imagine buying a vacation home 30 years ago for $50,000 and today it is worth $500,000. Your capital gain would be $450,000 and at 15% you would owe $67,500 in taxes!
Rather than sell the asset and write a check, you should consider transferring the asset directly to Mid-America. That way, Mid-America books the investment at fair market value while you take an equivalent income tax deduction. Since the transaction avoids capital gains taxes, you can actually deduct more from your income that if you had given straight cash. Donating appreciated assets is a great way to maximize your charitable goals.
What if you don’t want to sell a winner? Sell a depreciated asset and donate the proceeds to offset any capital gains you realize from an appreciated asset while still receiving a deduction for the gift of depreciated assets.
To discuss ways to maximize your sale of long-term assets contact Mid-America’s Director of Development at 219-864-2400 or by email.
Folks engaged in agriculture can face unique taxation and stewardship challenges, especially if they are unable to itemize and must take a standard deduction. If you take a standard deduction and do not receive a tax benefit from charitable gifts of cash, so why not consider a gift of commodities and take advantage of the tax benefits? A gift of commodities given directly to your church or Mid-America may help you avoid federal, state and self-employment taxes. The process is very simple.
Click on the Farm Commodity Gift fact sheet produced by the Barnabas Foundation for more information. Please consider making a commodity gift to Mid-America. We would be happy to help you arrange the transfer of the commodity and provide the necessary documentation.
In each of our lives there are special people whose memory we would like to honor. A meaningful way to pay tribute to a relative, friend or colleague is through an Honor or Memorial Gift. The person you honor will be notified of your gift. We will inform a family member about a memorial gift. Gift amounts will not be specified.
If you would like your gift to be in honor or in memory of an individual, please indicate who the gift is in honor or in memory of as well as the name and address to whom we should send notification.
The “IRA charitable rollover” incentive allows individuals age 70½ or older to exclude from their gross income gifts transferred directly from their IRAs to Mid-America Reformed Seminary. Under this provision, individuals may make gifts to charity from their Traditional IRA and Roth IRA accounts without any tax liability if their gifts are “qualified charitable distributions.” No charitable deduction may be taken, but distributions will qualify for all or part of the IRA owners required minimum distributions.
If you are a non-itemizer, this will eliminate the need to claim a charitable income tax deduction. Additionally, individuals who choose to make gifts in excess of 50 percent of adjusted gross income could also benefit. For higher income earners, the impact of receiving additional income on the taxability of social security payments, the deductibility of medical expenses, miscellaneous itemized deductions and child tax credit, and application of the alternative minimum tax can often result in a net income tax cost of making a charitable gift.
For more information click here for an IRA Rollover Fact Sheet.
For more information on immediate giving options contact Mid-America Reformed Seminary's Director of Development.