Complex Giving Made Simple
by Jessica Johnson, Board Chair
Every donation matters, and even one gift, your gift, impacts our community.
You are likely aware that a gift to New Life is income tax deductible. Beginning in 2018, Congress changed the rules so that it takes a larger gift than it used to for many Americans to see a reduction in income tax. Many donors are now choosing to “bunch” their charitable donations by giving more every other year, thereby getting a larger tax benefit in those years. Using a donor advised fund is a popular way to manage charitable gifts and facilitate regular giving while bunching donations.
DIFFERENT WAYS TO GIVE
Did you know there are other ways to give to New Life in addition to cash?
• By giving appreciated stock to New Life, you receive an income tax deduction for the fair market value of the stock, and you generally will not pay income tax on the stock’s embedded capital gains.
• Your tax-deferred retirement account (IRA) is subject to income tax and, at death, the account may also be subject to estate tax. If you are age 70 ½ or older, you can give New Life up to $100,000 from your IRA each year and exclude the gift amount from your required minimum distribution income, thereby avoiding ordinary income tax.
• You can name New Life as a beneficiary of some or all of your retirement account at death or include New Life as a beneficiary of your will or revocable trust when you update your estate plan. Please contact us to learn more about any of these easy yet powerful giving options.
CONSIDER A CHARITABLE TRUST
If you want to make a gift now but retain an income stream, you might consider a charitable remainder trust. You, your spouse, and other individuals can receive payments from the trust for a term of years or for your lifetimes. At the end of the trust term, New Life would receive the remaining assets in the trust. If you are interested in making a larger gift to New Life now and also gift assets to your children or other family members with little to no gift tax consequence, you could create a charitable lead trust and name New Life as the beneficiary of a stream of payments from the trust. The trust would last for a designated number of years, and at the end of the trust term, the remaining assets would be payable to your children (for example).
The charitable lead trust can be a significant gift and estate tax planning tool given the low interest rate environment. Your attorney and tax adviser would be involved in the preparation and implementation of a charitable remainder trust or charitable lead trust. Whether it’s helping women face an unplanned pregnancy or connecting children and parents through adoption, New Life depends on people like you to support our important work.
WE CAN HELP
At New Life Family Services, we are putting together a seminar, “Complex Giving Made Simple” led by industry professionals about how to maximize your giving in a way that benefits both you and New Life.
Contact Tammy at firstname.lastname@example.org or (612) 746-5664 for more information.