West Central Iowa Healthcare Foundation
Ways to Give and Planned Giving Donations
Gifts of Cash
These are an outright gift of cash by a donor, for which the donor receives an income tax deduction as prescribed by current law. Pledging your gift over a three-year to five-year period may allow you to make a more substantial gift while affording you the opportunity to adjust the timing and amount of each payment to achieve the most beneficial tax treatment.
Gifts of Appreciated Publicly Traded Securities
This includes a gift of stocks or bonds, which are (or will be) readily marketable. The deduction for outright gifts of appreciated long-term securities (held more than 12 months) is equal to the fair market value of the securities on the date the donor relinquishes control of the assets to the campaign office, and none of the appreciation is taxable for capital gains purposes. Caution: do not sell the stock; you must transfer it to achieve the most advantageous tax treatment!
Gifts of Closely Held Stock
A gift of stock of a private corporation. The donor may avoid capital gains on appreciation of closely held stock, while attaining a tax deduction based on the stock’s fair market value. As with publicly traded stock, the donor may obtain an immediate tax deduction up to 30% of the adjusted gross income. If the gift exceeds 30% of adjusted gross income, the remainder of the deduction generally can be carried over for up to five years.
A gift of cash, securities, or real property, made upon the donor’s death, through provisions in his/her will or living trust. The gift is not included in the estate and is exempt from estate taxes.
Charitable Remainder Trust
An irrevocable transfer of assets to a trust, naming West Central Iowa Healthcare Foundation as the ultimate beneficiary. The donor receives annually an income of a set amount or a fixed percentage, based on the wishes of the donor and the trust’s value each year. A donor generally receives an immediate tax deduction and may add to the principal of a Charitable Remainder Trust in future years. If the donated assets consist of appreciated securities, capital gains taxes also may be avoided.
Charitable Gift Annuity
An irrevocable gift placed in trust in exchange for a guaranteed fixed income for life, which is calculated to take account of both the size of the gift and the donor’s age at the time of the gift. Upon the donor’s death, the assets of the trust are passed to the West Central Iowa Healthcare Foundation. A current charitable deduction is available based on the IRS annuity tables. Here, too, if the donated assets consist of appreciated securities, capital gains may be avoided.
Deferred Income Buildup Plans
This is plan wherein designation of the West Central Iowa Healthcare Foundation as the beneficiary of the donor’s qualified pension plan, IRA, Keogh, commercial deferred annuities, or employee stock option plans. This allows the donor the use of the assets during the donor’s lifetime, while providing the donor with the opportunity to make a large future gift and reducing the donor’s taxable estate.
Charitable Lead Trust
An income producing asset placed in a trust, the income of which is contributed to the West Central Iowa Healthcare Foundation for a designated period of time, after which the trusted asset is returned to the donor or other beneficiaries named by the donor. The donor may gain immediate tax advantages or may reduce gift or estate taxes when the assets are passed to children or grandchildren.
Gifts of Real Estate
This includes almost any type of real property from personal or vacation homes and commercial buildings to farms or ranches and even undeveloped lots. The property may be donated outright; serve as the corpus of a trust arrangement; or if it is the donor’s personal residence, the donor and/or spouse may gift the property with the right of lifetime residency. An immediate tax deduction is available and capital gains taxes may be avoided. Acceptance of real estate gifts is at the discretion of the West Central Iowa Healthcare Foundation Board of Directors.
Gifts of Tangible Property
Many types of new and used equipment can be considered gifts of tangible property when the West Central Iowa Healthcare Foundation uses a donated asset, such as a computer system. The donor is entitled to a charitable deduction equal to the fair market value of the asset at the time of the gift. If the donated asset is not used by the West Central Iowa Healthcare Foundation, the charitable deduction is set at your cost basis in the property. Acceptance of tangible property gifts is at the discretion of the West Central Iowa Healthcare Foundation Executive Director and/or the West Central Iowa Healthcare Foundation Executive Committee.
Gifts of Life Insurance
This would be the designation of the West Central Iowa Healthcare Foundation as the owner and beneficiary of a policy. For a new policy, this allows the donor to classify the regular premium payments as charitable tax-deductible contributions. For existing policies, particularly those a donor no longer needs, a donor can generally deduct the entire replacement value of the policy plus any premium payments that the donor subsequently makes. If the policy is not completely paid up, its approximate cash value plus future premium payments are usually fully deductible.
Executives and other recipients of employee stock options can now take advantage of a convenient way of making a gift to the West Central Iowa Healthcare Foundation. Through cashless options, you can now make a contribution in one simple transaction with no market risk. The West Central Iowa Healthcare Foundation can take care of the transaction for you through an independent financial services firm. You are entitled to a tax write-off on the difference between the market value of the stock and the option exercise costs. West Central Iowa Healthcare Foundation will sell the shares that you contribute and pay your company for the cost of the shares. This is a win/win situation for both the West Central Iowa Healthcare Foundation and you and a convenient and economical way to assist us in reaching our goals.
Gifts of grain or livestock
With a gift of unsold commodities of grain and/or livestock, you could make a significant investment in the future of healthcare and still reduce your income tax.
Gifts of depreciated farm machinery
With a gift of depreciated farm machinery, farmers can avoid paying income taxes on ordinary income from the restored appreciation, and if the machinery has a remaining cost basis, the donor can generally receive a charitable deduction for the amount.
This information is provided for educational purposes only. We urge you to consult your attorney, accountant, or financial advisor to determine the most advantageous form of giving that fits your particular tax and financial situation.