Ways of Giving
A Few Introductory Remarks
Those who wish to make a gift to the school can do so using various sources of assets and income, as presented and illustrated here.The information shown here is not exhaustive – it is meant to stimulate further inquiry. It is strongly advised, however, that you consult your attorney or financial advisor before making a final gift decision.
- Most common and simplest method for making a charitable contribution.
- Fully tax deductible up to 50 percent of adjusted gross income (AGI), with a five-year carryover allowed for any excess deduction.
- The higher the tax rate, the greater the savings.
Multi- Year Pledges
- Payable over a three to five-year period.
- Deductible in the year a payment is made.
- Takes advantage of programs offered by many employers.
- Leverages donor’s gift to a higher level.
- By giving publicly traded stocks held long term (more than one year) directly to the school, taxes on capital gains will be avoided.
- Full fair market value of the stock gift is tax deductible up to 30 percent of adjusted gross income (AGI), with a five-year carryover allowed for any excess deduction.
- Donor sells property, takes loss for tax purposes, then contributes the cash received from the sale.
- Donor receives a tax deduction for both the loss and the charitable gift.
- Produces a current tax deduction equal to fair market value of the stock.
- Corporation may redeem shares of the stock from the school.
- Could reduce liability for accumulated earnings tax.
- Possible for donor to make gifts of residence, farm, or vacation home, reserving the right of occupancy as long as donor and spouse live.
- Irrevocable gift qualifies for immediate tax deduction based on present value of remainder interest.
- Assign directly to Saint Stephen’s Episcopal School or, preferably, transfer through broker.
- Amount of contribution is fair market value on the date of transfer.
Charitable Gift Annuity
- Provides a fixed income for the lifetime(s) of one or two annuitants.
- Amount paid determined by rates recommended by the American Council on Gift Annuities.
- The older the annuitant, the higher the level of income.
- Portion of gift and income are tax deductible.
Deferred Gift Annuity
- Offers increased income and tax benefits.
- All basic features and benefits of a gift annuity.
- Income delayed until a future date chosen by the donor.
- Rate of return and tax deduction dependent on length of income delay.
Life Income Trusts
- Trust assets are funds or property contributed by donor (usually $100,000 or more).
- Flexibility in type of property that can be donated.
- Real estate and municipal bonds may be used.
- Provides a fixed amount of income (Charitable Remainder Annuity Trust).
- Provides a variable level of income (Charitable Remainder Unitrust).
Charitable Lead Trust
- Donor provides assets for use for a limited period of time.
- Funds are invested to provide income to Saint Stephen’s Episcopal School.
- Assets returned to donor or to estate at end of designated period.
- Can fulfill a pledge while reducing estate and gift taxes that might otherwise be due on assets given outright to heirs.
- Make Saint Stephen’s Episcopal School sole owner and beneficiary of paid-up policy.
- Receive income tax deduction for the cash surrender value of policy.
- If policy not fully paid, continue to pay premiums.
- Receive tax deduction for annual premium amounts.
- Outright bequests, as well as certain bequests in trust, are not subject to estate taxes.
- Actual cost is less than face value of gift because of tax benefits to estate.
- Bequest can take any of the following forms:
- Bequest of a dollar amount of particular securities or other property.
- Residual bequest of all or portion of estate after payment of specific amounts to other beneficiaries.
- Contingent bequest to take effect if other beneficiaries die before the donor.
- A bequest can often be arranged simply with the addition of a codicil amending an existing will.