Types of Gifts That Can Be Given
Publicly traded securities are the most common form of non-cash charitable gifts. You may find that securities are the most attractive assets to give, because they are often highly appreciated, easily transferred, and in most cases, easily valued for deduction purposes without the need for a formal appraisal. The most common forms of securities gifts are shares of stock, bonds, and shares of mutual funds. If you gift publicly traded securities you have owned for at least one year, you will be eligible for a deduction for the full market value of the security on the date the Evangelical Presbyterian Foundation receives it. The appreciation (gain) on these gift securities is not subject to taxation. You also may be able to earn an income from your gift through one of our Life Income Plans.
A gift of real estate can be an attractive way to make a substantial commitment to the EPC Foundation.
A personal residence may be an ideal gift under the right circumstances. A personal residence may take the form of a single-family house, a condominium, or a duplex. It may be owner-occupied or may be rented. If you give your residence outright to the EPC Foundation, you receive a charitable deduction for the full fair market value of your residence, less any debt. You also avoid capital gains tax, if any, on the amount your residence has increased in value since you purchased it, and you are not subject to gift or estate taxes since the value of your residence is removed from your estate.
Another option with a personal residence is to retain a life estate in the property allowing you the use and enjoyment of the home for your lifetime. Upon your death, the property would then pass to your designated charity. In this instance, you will remove the property from your taxable estate, if applicable, and will be eligible for a charitable gift deduction on your income tax return for a discounted value of your property.
Commercial, rental or vacation property is a gift you can make to the EPC Foundation. In your real estate portfolio, you may have properties from which you have received significant rental income and depreciation benefits. These commercial properties may now present undesirable challenges, including the need for time-consuming management, an obligation to pay increased maintenance costs, and the prospect of substantial capital gains taxes if the property were sold. By giving your real estate to the EPC Foundation, you are relieved of management responsibilities, avoid capital gains taxes, reduce your estate tax, and fulfill your charitable and family objectives.
Vacant land may also make and excellent charitable gift particularly if it is coupled with a Life Income option that provides future cash flow to the donor and potential immediate income tax deductions. You also may be able to earn an income from your gift through one of our Life Income Plans.
Closely held Business Interests, Equipment or Assets
Gifts of closely held business interests achieve both financial and charitable goals. The proper charitable plan can unlock assets, effectively transferring ownership to another person, and avoid capital gain tax - all while providing a lasting and meaningful gift to the EPC Foundation or to your donor - advised fund.
While there are ready markets for publicly traded securities and most real estate, there is a tremendous amount of capital invested in holdings that are not readily marketable. The most common are closely held interests owned by the principals of the subject business. In addition to this lack of liquidity, typically there are two primary consequences if the capital structure of a closely held business is altered: taxes are imposed at both the corporate and personal level, and control of the business is endangered. If a portion of the business is transferred outright to the EPC Foundation, significant taxes may be avoided. The EPC Foundation could sell the interest back to the corporation, the employees, the heirs, other shareholders, or a combination of all four, effectively transferring control. This strategy outlines the goal of a successful closely held business transaction: to free-up capital in a tax advantaged way via a strategic transfer of control. Please contact our office for further details. Other gift planning strategies could be employed to significantly reduce or eliminate gift or estate taxes while maintaining family control of the business. Please contact your legal counsel about the applicability of this type of charitable gift to your own particular situation.
Retirement Plan Assets
If you give IRA accounts, Keogh accounts, Section 401(k) and Section 403(b) plans, and other qualified pension and profit-sharing plans otherwise known as "qualified retirement assets", you are eligible to receive a tax deduction for your gift. These retirement plan assets may be gifted during life or at death. However, the consequences of these choices are very different.
A gift of these assets during life requires that they first be withdrawn from the retirement plan and then gifted to the EPC Foundation. Normally the amount withdrawn is fully taxable to the owner of the plan. The resulting gift is then deductible to the extent of 50 percent of adjusted gross income, limiting the extent of charitable tax benefits. Resent legislation has also made it possible to give up to $100,000 or an Individual Retirement Account if you are age 70 ½ or older.
The EPC Foundation can be designated as the beneficiary of all or a portion of a retirement account at death. A gift of this type provides an estate tax charitable deduction for 100% value of the amount distributed to the Foundation. It also provides important benefits by limiting the tax on income in respect of a decedent (i.e. ordinary income tax, not capital gains rate tax) that would otherwise apply to heirs.
Life insurance is a valuable gift option that is often overlooked. Life insurance is frequently purchased as part of an overall financial or estate plan. As circumstances in life change, the need for insurance may decrease. A gift of a paid-up policy can provide tremendous benefits to the EPC Foundation.
Estate Gifts and Bequests
A Christian will has often been described as a lasting testimony of your faith and a road map that gives direction in transferring an asset from one person to another. It is the satisfaction in being able to make a lasting witness of your faith in Christ by providing for the work of the Church and the advancement of other Christian ministries. A carefully prepared will is the easiest way to ensure that your heirs are provided for in the way that you intend. It is also one of the simplest ways to make a gift while keeping all your assets available during life in the event your circumstances and needs change.
The process of making a gift through your will helps you focus attention on the future for both you and your loved ones. A will is often used in combination with charitable trusts, life income plans, donor - advised funds, family partnerships or other gift planning vehicles. The process of creating a Will can be very complex and should be completed only with help from your legal and financial advisors.
Cash & Check
A gift of cash is the most common and easiest way to make a gift to the EPC Foundation. If you make a cash or check gift, you will be eligible for a tax deduction to the fullest extent allowable by law potentially giving you a.a federal income tax deduction for up to 50 percent of your Adjusted Gross Income and carry forward any unused portion for up to five additional years. Significant and meaningful gifts of any size can be made using cash.
If you have any questions about becoming a donor that have not been answered in this section, please to contact us for more information.