Different than charitable gifts that are used to help the patients and families of today, planned gifts are arranged today but are not available for services and programs until sometime in the future.
In many instances, planned gifts can provide additional income for the donor today!

Planned Giving Impact

Planned giving will play an important role in advancing the healthcare for our children and their children. By establishing a planned gift today, a donor can extend influence into the future on quality of health care right here in our own backyard.
Planned gifts can be made to assist any area:

• to ensure advanced technologies for health diagnosis;
• to provide new health services;
• to ensure the advancement of current services;
• to meet health training demands;
• to fund patient assistance and educational programs;
• to ensure the hospitality house;
• to conduct research in health care treatments.

These philanthropic goals can be accomplished through a planned giving arrangement that provides a life income to a donor or his/her beneficiary, provides a charitable income tax deduction, allows donation for highly appreciated securities without incurring capital gains, or reduces estate taxes.

Gifts for Tomorrow

Planned gifts are advantageous because they can provide powerful tax benefits as well as, in some instances, sources of income. Simply stated a planned gift is part of a donor’s fiscal management strategies and even a donor’s estate planning process. Gifts for tomorrow that can be established today include: Bequests; Life Insurance Policies; Charitable Gift Annuities; and Charitable Remainder Trusts. Many of these are very simple arrangements that quickly meet the needs of a donor while in many instances allowing for individuals to make larger gifts than originally thought possible. The staff of the Saunders Medical Foundation will work with each donor to ensure the special intent of each planned gift.

Benefits of Giving

Although many families and individuals give generously to charity, the vast majority of them do not give in a planned way, and that hurts both the donors and ultimately the charities. The majority of households employ a charitable-giving strategy often referred to as "checkbook philanthropy." This is not a strategy at all, but the unplanned way of giving of small amounts to a variety of charities, commonly in cash, often in reaction to solicitations.

Planned giving is an organized approach to giving that evaluates the donor's personal values, selects charitable organizations and gift-giving vehicles that best reflect those values, and maximizes the financial and tax benefits of the gifts.
Efficient use of money

Planned giving makes use of techniques that maximize the dollar amount that ultimately benefits the charity. For example, the gifting of stock avoids the donor's payment of capital gains taxes, and thus leaves more to the charity. However, sometimes it's not possible to gift stock directly to smaller charities, so the donor must employ other charitable vehicles to accomplish such a gift. It may make more sense to give during one's lifetime instead of waiting until death. On the other hand, you might be able to leave more to a charity over the long run by deciding on a five percent payout rate from a charitable remainder unitrust rather than a ten percent payout rate.

Tax benefits

Although many make donations out of a genuine desire to give, tax benefits play an important role. For one thing, the tax benefits often make it financially feasible for the donor to make a gift. Charitable remainder trusts and gift annuities, for example, provide the donor with lifetime income while ultimately benefiting the charity. Furthermore, as exemplified by the gifting of appreciated property, the tax savings benefit the charity as well.

Teach your children

Planned giving involving ongoing influence such as through donor-advised funds or foundations can be an excellent way to involve the donor's children. They can help decide who is to receive gifts, and in some cases can continue that role after the donor's death. Our legacy of being philanthropic is one of the values each parent should pass on to their children.

Provide a legacy

Some donors wish to leave an ongoing philanthropic legacy, something that generally cannot be done with standard checkbook giving.
The options for making planned gifts are many. They include bequests made through wills, charitable remainder trusts, charitable lead trusts, private and community foundations, charitable annuities, and donor-advised funds, to name only a few. Each option presents advantages and disadvantages, so you will want to review those options with the Foundation or other charitable expert to see which ones best fit your values and personal financial situation.

The act of giving a gift, whether we're alive or deceased, helps us continue a particular cause or interest after we're gone.

IRS definition of charitable giving

For tax purposes, the Internal Revenue Service defines charitable gifts as complete and irrevocable transfers of money, property or other assets to IRS-recognized charities.

Remember, in order to receive tax-saving benefits from giving to charitable causes, your gift must be given completely (generally no strings attached) and irrevocably (generally cannot be changed or withdrawn) to an IRS-recognized charity.
There are some financial incentives involved in giving to charitable causes. If you give to charities recognized by the Internal Revenue Service, you can:

• Give gifts without paying any gift taxes on the gifts.
• Receive a federal income tax deduction for your charitable lifetime gift, if you itemize charitable deductions on your tax return and keep receipts.
• You can receive a federal estate tax deduction after death if you've made charitable gifts to IRS recognized charities through your will, trust or beneficiary designations.
• The sale of some of your assets may result in significant capital gains tax. It is possible to reduce or eliminate capital gains tax on assets gifted to IRS recognized charities. This is a very popular incentive for people who face significant capital gains taxation on the sale of their assets.

Reasons to act now

There are several important reasons why you should not delay documenting your intentions concerning charitable giving, including:

Health. Charitable gift planning involves time and careful consideration. To create or update a will or trust bequest requires sound mental health.Applying for a life insurance contract to create an insurance gift or to replace assets given to a charity for your heirs requires insurable physical health. The longer you postpone the charitable gift planning process the greater is your risk of becoming incapable of using some very desirable options.

Death. No one can escape it. You can wait too long to pursue your charitable giving desires. Charitable giving after your death usually will not be accomplished by your heirs if you have not clearly communicated your intentions while living.

Tax law changes. The laws today may change tomorrow. Desirable charitable giving options available today may seemingly disappear overnight. The old saying, "Never put off till tomorrow what you can do today," can be very true as it applies to charitable gift planning.

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How to get started

To help you begin your look into charitable giving, first examine your entire financial picture. The extent of your net worth - and the impact you can have on charities and your family - may be much greater than you think.

That's why it's important to work with Saunders Medical Foundation along with a competent attorney and tax adviser as they become part of your team in establishing a charitable giving plan. They'll help you determine what gift techniques are best for you.

Build Your Gift

Have you considered making a gift to us, but you're just not sure what type of gift to make? Our step-by-step guide will help you decide.

Which type of charitable gift would you prefer?

 I would prefer to make a charitable gift during my lifetime.

 I would prefer to make a charitable gift as part of my estate

How would you prefer to arrange your gift to us?

 I would prefer to make a gift in partnership with United Hospital Foundation. This type of gift will allow me to receive financial benefits.
 I would prefer to make an outright gift. This type of gift will allow me to provide benefits to United Hospital Foundation now.

How would you prefer to make your gift in partnership with us?

 I would prefer to provide through a gift of my home after I'm gone, which would allow me to keep lifetime use of my home and provide an income tax deduction now.
 I would prefer to provide through a charitable gift annuity or trust, which could provide income for me or my heirs.
 I would prefer to provide income to United Hospital Foundation in trust for several years and then give the remainder back to my family or to me.
 I would prefer to provide through the sale of an asset to United Hospital Foundation for less than its fair market value.

What is your primary financial planning goal?

 I would prefer to receive a fixed, regular income.

 I would prefer to receive an income that has more flexibility and could act as a hedge against inflation

Which options appeal most to you in receiving your fixed income?

 I would prefer to make a simple gift that would pay me a fixed dollar amount for my lifetime.
 I would prefer to receive a higher interest rate in exchange for deferring my payments for a period of time.
 I would prefer to create a trust that would provide an immediate income tax deduction and a fixed income for life.

Gift Annuities Defined

A gift annuity is a simple, contractual agreement between a donor and UHF in which you transfer assets to us in exchange for our promise to pay one or two annuitants payments for life.

By donating through a gift annuity, you: (1) contract for a fixed payment for yourself or yourself and another individual, if you choose, and (2) make a gift to UHF. If you itemize deductions on your tax return, savings from the charitable deduction reduce the net cost of the gift.

For a period of years, based on a government table of life expectancies, a portion of each payment received is considered a nontaxable return of your investment in the gift. This further increases your after-tax dollars available for spending or investing.

An annuity funded with appreciated property results in these additional advantages: (1) the gain allocated to the gift portion completely avoids the capital gains tax, and (2) the portion of gain to be recognized can be spread over the expected term of the contract (provided that the donor is a primary annuitant and the annuity interest is assignable only to the charitable organization).

With a deferred payment gift annuity, the start of payments is delayed until a specific date, initially determined by the donor. Deferral of payments increases the initial income tax charitable deduction, tax savings and the annuity rate. However, it also reduces the nontaxable amounts to be received. This option is appealing to younger donors who wish to improve future income, such as at retirement.

Understanding Annuity Rates

Annuity rates are higher for older annuitants and lower for younger annuitants, based on life expectancy. As a result, gift annuity contracts are generally more appealing to older donors because the purchasing power of a fixed dollar return can shrink over any long period, even with modest inflation.

Rates are also adjusted according to the number of annuitants, with rates for two-life contracts often lower due to the extended life expectancy. The age of an annuitant is the age reached at the nearest birthday when the contract is made, and rates are the same for men and women.

A specific annuity rate is a matter of agreement between the donor and the issuing charitable organization. Below you'll see how one-life annuity rates increase with age. These rates are recommended by the American Council on Gift Annuities and are re-determined periodically.

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Calculate how a charitable gift annuity can benefit you.

Calculate how a deferred charitable gift annuity can benefit you.
How would you prefer to fund your outright gift to us?
 I would prefer to fund my gift with tangible personal property, which would allow me a simple tax deduction.
 I would prefer to fund my gift with cash, which is one of the easiest and quickest ways to give.
 I would prefer to fund my gift with real estate, which would allow me to avoid capital gains tax on the sale of the real estate.
 I would prefer to fund my gift with appreciated securities, which would allow a reduction in capital gains tax.
 I would prefer to fund my gift with life insurance, which allows me to make a large gift with little cost.
 I would prefer to fund my gift with business interests, which would allow United Hospital Foundation to share in my successful business.

Getting Started: Gifts of Securities

A stock portfolio is often among the most valuable assets you own, and one that carries substantial capital gain—appreciation in value. The downside to assets that have increased in value over the years is that the federal government is prepared to levy taxes of up to 15 percent on your capital gain from securities. With careful planning, you can reduce or even avoid federal capital gains tax. We can show you how charitable giving may be one of your best defenses against capital gains taxes.

As stock prices increase, so do the taxes you owe on the capital gain, which are generally charged at a rate of 15 percent (5 percent if you are in the 10 percent tax bracket). But when you donate publicly traded stocks held long term (owned for more than one year) to a qualified charitable organization such as United Hospital Foundation, you avoid all capital gains taxes. Plus, you may take the full fair market value of the stock gift as a charitable deduction on your income taxes. The maximum deduction you may take within a given tax year is 30 percent of your adjusted gross income. If you are unable to take the entire deduction in one year, you may carry the excess deduction forward for five additional years.

Even if you own stock you wish to keep in your portfolio, giving us the stock and using cash to buy the same stock through your broker provides the same income tax deduction with a new, higher basis in the stock.

If you have stock losses, sell the stock yourself to realize the loss and take the deduction for tax purposes. Then generate a charitable deduction by donating the cash proceeds of the sale to UHF.

How Much of Your Estate Will Go to Taxes?

For managing your capital gains, three aspects of the federal tax rate structure are significant.

• The spread between the top federal tax rate applied to long-term gain and the highest tax rates applied to ordinary income is significant. Long-term capital gains tax rate is 15 percent for most assets (28 percent for some). Current tax rates for ordinary income exceeding specified amounts in each tax bracket are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent. For taxpayers who fall within the higher tax brackets, long-term capital gains tax is more attractive than ordinary income tax.
• Estate and gift taxes are computed using the unified rate schedule, where the rate of tax is 45 percent.
• The tax on generation-skipping transfers of assets is a flat 45 percent, too. Should you pay capital gains tax now, instead of a higher gift or estate tax later?

Ways to Take Advantage of Your Capital Gains

You can achieve many desirable tax benefits through your philanthropic plans, but there are several noncharitable strategies that should also be considered for reducing your taxable estate.

• Tax deferral. There is no taxable gain on appreciation until an asset is sold or exchanged.
• Capital losses. Capital losses incurred can offset other taxable income.
• Excludable lifetime gifts to others. Gifts to heirs during your lifetime qualify for the gift tax exclusion of $12,000 per recipient per year (indexed for inflation) or $24,000 if your spouse joins in the gifts. The recipients, however, inherit the cost basis of the original owners.
• Stepped-up basis for heirs. Most appreciating assets held for distribution to heirs in the estate settlement process completely avoid the capital gains tax. If they are part of a taxable estate, however, the unified estate and gift tax will be on the higher appreciated fair market value. In larger estates, this future transfer tax may exceed a current capital gains tax and requires careful analysis.

If such assets remain in the estate, to be transferred to heirs at the stepped-up value at the date of death (or an alternate valuation date six months later), this becomes the new basis for the heirs and reduces their capital gains tax liability when the assets are sold.

Using Gains to Achieve Your Philanthropic Objectives

Income tax charitable deductions have become increasingly significant in reducing taxable income, particularly since tax reform has eliminated many other tax deductions.

When appreciated property held long term (owned more than one year) is used for a charitable gift and the donor would have otherwise sold the stocks for market or other reasons, two tax savings result. First, the donor is entitled to a charitable deduction for the full fair market value rather than the original cost, and second, the donor avoids the capital gains tax.

Whenever income tax deductions for gifts to publicly supported charitable organizations are claimed for gifts of long-term capital gain property, the total of such deductions that can be used in a particular year is limited to 30 percent of the donor's adjusted gross income, rather than the 50 percent annual limitation for cash gifts. For most donors, the total deduction is typically all usable, since it can be carried forward for five years.

Outright Gift of Capital Gain Property

Bob gives us shares of publicly traded stock he has held for more than one year. Their fair market value (the average of high and low trades for the day of the gift multiplied by the number of shares) is $12,000; their original cost, $5,000. His marginal federal income tax rate is 28 percent, and he is not subject to state or local income taxes.

The $4,410 of total taxes ($1,050 capital gains + $3,360 income tax) avoided that the government "contributed" to the gift transaction nearly equals Bob's net cost, and Bob has made a gift of $12,000 to his favorite charitable organization.

Getting Started: Gifts of Cash

If you itemize deductions on your tax returns, the first tangible benefit of making a gift of cash to United Hospital Foundation today is an income tax charitable deduction for the full value of the gift in most cases. The resulting reduction in income taxes payable lowers the net cost of the gift. If you are subject to state and/or local income taxes as well as federal, the combined marginal rate (after the federal deduction for those income taxes paid) should be taken into consideration in determining the gift's net cost.

If you don't usually itemize deductions, you may want to consider it for any tax year in which you make a sizable charitable donation. One technique used by people who have few itemized deductions is to alternate between years in which they take the standard deduction and make few charitable gifts, and the years in which they give double their desired annual philanthropic support and shift to itemizing.

Beware of the annual limitation on the use of charitable deductions claimed for gifts to public charitable organizations, which for any specific year is 50 percent of your adjusted gross income (AGI) for cash gifts. Any unused deductible amounts can be carried over and used for as many as five additional years, if necessary.

If you predict that your estate will be subject to estate tax at your death, keep in mind that you receive a federal gift tax charitable deduction for the value of gifts of cash made during your lifetime. Since the value also is removed from your future estate, it completely eliminates the federal estate tax. This savings reduces the net cost of your charitable gifts.

Outright Gifts and Their Results

Cash gift. A gift by check is one of the most common methods for making an outright charitable contribution. For gifts by check of $250 and more, donors must have written confirmation from the charitable donee, as canceled checks are no longer sufficient proof of a deductible gift at this level. Cancelled checks are acceptable for checks of less than $250. True cash gifts (not checks), regardless of the amount, must be evidenced by a receipt from the charitable organization.

To illustrate the net cost of a $1,000 cash gift, assume the gift is made by a taxpayer with a combined state and federal marginal income tax rate of 36 percent. The amount of the tax bracket, multiplied by the amount of the gift, is subtracted from the gift to determine the net cost to the donor.

36% x $1,000 = $360$1,000 - $360 = $640

The Gift of Life Insurance

When you first bought a life insurance policy, you probably hoped to ensure the financial stability of your family should something happen to you or your spouse. Have your circumstances changed since then?

You may own an insurance policy that has a substantial cash surrender value, yet the original purpose for the protection no longer applies. The policy might have been purchased initially to provide financial security for a spouse now deceased, to educate children now grown or for liquidity to pay death taxes when liquid assets were in short supply. This policy can be a sort of hidden asset, available to be used for your philanthropic purposes.

For a gift of a paid-up policy, the tax deduction is the cost of replacing the coverage with a comparable policy. The deduction cannot be greater than your net investment in the policy (total premiums paid less any dividends received). The charitable deduction is reduced by any outstanding balance of a policy loan, which may also be considered additional taxable income.

To qualify for the federal charitable deduction on a gift of an existing policy, you must be sure to name United Hospital Foundation as owner and beneficiary.

If premiums on the policy are still payable, there are two options to be considered. You may stipulate that the assignment of ownership of the policy at its current value is the total charitable gift, immediately available for our use. In that case, we might surrender the policy for cash. Or we might decide to accept an amount of paid-up insurance. In either case, you are relieved of the obligation to make further premium payments.

Getting Started: Gift Strategy Using Closely Held Stock

At first, the idea of donating some of your closely held stock may sound a bit strange. After all, how could we, or any other charitable organization, benefit from such a gift?

Let's assume you're unable to make a substantial cash contribution out of your own pocket, but there is cash in the corporation from retained earnings. These have been taxed on the corporate level and, if distributed as dividends, would be taxed again on the individual level.

You cannot or will not sell the closely held stock to the public, but you decide to give some shares to UHF. We may then present the stock to your corporation for redemption. This redemption can be accomplished by using retained earnings for the purchase, letting us receive much-needed funds.

Are there any problems with this plan? The Internal Revenue Service has ruled that you cannot legally bind a charitable organization to go through with the redemption at the time it receives the shares. There can be no prearranged contract or agreement for the corporation to buy the stock. But the IRS accepts a tax court holding that a charitable organization may independently offer the donated stock for redemption.

A Typical Example

Phil owns virtually all of the stock in a company he founded. Its current valuation is $2 million. Phil's cost basis is zero because his original investment has long since been written off for tax purposes.

The corporation has $200,000 in retained earnings, and Phil is concerned that the IRS may question the retention of this amount and decide to impose a second tax on it. Moreover, he has wanted to make a major contribution to us. So, Phil gives us $200,000 worth of his stock, and both he and United Hospital Foundation accomplish their goals.

• He receives an income tax deduction of $200,000. (Note: When you claim a charitable contribution deduction for a donation of closely held stock valued at more than $10,000, its deductibility depends upon you obtaining and attaching to your tax return a qualified appraisal of the stock.)
• He avoids federal taxes on capital gains plus the additional state taxes.
• His corporation solves its potential accumulated earnings problem, including a potential federal penalty tax.
• He retains full control of his company.
• The charitable organization receives $200,000.

Impact on Ownership Percentage

Your gift of closely held stock will reduce your percentage interest in the corporation if you own less than 100 percent. If you own all of the stock, however, a gift of a portion followed by a redemption will leave you still owning 100 percent of the outstanding stock.

If you own less than 100 percent and the balance is held by family members whom you wish to benefit, the gift and redemption can be a tax-efficient method of increasing their percentage interests in the corporation.

Getting Started: Gifts of Real Estate

Original founders of successful businesses oftentimes hold assets that are greatly appreciated. In many instances, the basis can be practically zero.

If you've owned your home or other real estate for a long time, no doubt it has increased in value significantly. What happens if you sell the property?

First of all, the sale is subject to capital gains tax on the property's appreciation. If the property has been your main home for at least two of the past five years, you can exclude up to $250,000 of gain ($500,000 for married couples). However, this opportunity to avoid capital gains tax doesn't apply if the property is a vacation home, land or any real estate other than your primary residence. Plus, there's the cost of marketing and selling real estate, which also takes time and effort, even if you use professional assistance.

Before you sell real estate, consider a new option. If you'd like to help fulfill our mission, your property opens the door to a unique giving opportunity: donate the property to us. You can give the property outright, place it in trust or give it by will. All of these methods will enable you to enjoy personal financial benefits while supporting our work in a meaningful way.

Let's look at the various federal rules used to figure your tax savings, and apply them to certain kinds of gifts to show how you can benefit.

Tax Benefits of an Outright Gift

When you make an outright gift of real property held for more than a year, you obtain an income tax charitable deduction equal to the property's full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes.

By donating the property to us, you also avoid capital gains tax on the property's appreciation. Furthermore, the transfer isn't subject to the gift tax, and the gift reduces your taxable estate.

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How would you prefer to arrange your estate gift to us?

 I would prefer to leave a gift of my retirement plan assets, which would allow me to avoid the twofold taxation on the assets.
 I would prefer to leave a gift of my life insurance, which would provide a generous gift with attractive tax benefits upon my death.
 I would prefer to leave assets in my estate through a bequest, which is one of the most popular types of planned gifts.


Example: Mary gives us a vacation cottage she no longer uses. It originally cost $50,000 but is now worth $150,000. She gets a $150,000 charitable deduction, which represents a tax savings of $42,000 in her 28 percent tax bracket. And she completely avoids tax on the $100,000 of appreciation. Now she no longer has to maintain the cottage, and the property won't be taxable in her estate.

Your deduction for a gift of appreciated real estate in any year is generally limited to 30 percent of your adjusted gross income, with a five-year carryover of the unused deduction. If you elect to base your charitable deduction on the cost of the property, this raises your AGI limitation to 50 percent with a five-year carryover, but this has implications for all gifts made during or carried over to that year.

For real estate you've held only short-term, your charitable deduction is limited to the property's cost basis, but there's still no tax on the appreciation. The deduction may be claimed up to 50 percent of your adjusted gross income, again with a five-year carryover for any excess value.

Your gift is usually effective when a properly executed and notarized deed, suitable for recording, is delivered. The amount of your deduction for a gift of real estate (if more than $5,000) must be substantiated by a qualified appraisal of its fair market value.

Obtain a Life Income From Your Gift

Instead of making an outright gift of real property or establishing a retained life estate, you can use unmortgaged property to fund a qualified charitable remainder trust. Once the property has been transferred to the trust, the trustee can then sell it and invest the proceeds in income-producing securities, which become the source for lifetime income payments to you and any other recipient you name. When the trust terminates, we receive the remainder (without exposure to estate taxes when spouses are the only income beneficiaries).

Calculate how a charitable remainder annuity trust can benefit you.

Calculate how a charitable remainder unitrust can benefit you.

If you itemize, you will benefit from a substantial current income tax deduction. The amount of the deduction is determined by your age when the trust is created, the value of the trust assets, and the annual percentage or amount to be paid to you. And when you transfer appreciated property, you won't pay any tax on the capital gain.

Tax Savings for Partial Use

Say you have a home you don't occupy year-round. You can make a deductible gift to us of an undivided interest, allowing us exclusive use of the property for part of each year.

A vacation home can be ideal for this purpose. For example, you could give us a half interest. You would continue to use the property for six months of each year while we, as half owner, would use it for the remaining six months. You receive an income tax deduction for the fractional interest contributed to us, based upon its market value. That interest will also escape estate taxes.

You can also give us a remainder interest in the part of the property you retain. Then you receive an additional income tax deduction, based on your age and other factors.

Bargain Sale Tax Benefits

You can sell long-term appreciated real estate to us for less than its value, subject to our consent. This transaction is part gift and part sale. You receive a charitable deduction for the difference between the sale price and the higher fair market value.

Example: Ellen sold the home she purchased many years ago for $30,000 to a philanthropic institution for the same amount, even though it was really worth $90,000 at the time of the sale. Her charitable contribution is $60,000 ($90,000 fair market value less $30,000 sale price).

Ellen does incur a capital gain in this type of transaction, but it's much less than for a sale at full market value. She is treated as having sold one-third of the property, so one-third of the $30,000 basis, or $10,000, is allocated to the sale portion. Therefore, she has a gain of $20,000 ($30,000 received from the sale less $10,000 basis attributable to the sale portion). However, $40,000 of the appreciation attributable to the gift escapes taxation. Plus, she receives a $60,000 charitable deduction.A bargain sale accomplishes the gift and provides you with immediate cash, while also relieving you of the time, effort and costs of a normal sale.

Keeping Mineral Rights When Giving Real Estate

You can make a partially deductible gift of your entire interest in certain real estate, reserving the right to subsurface minerals and the access to them (but not surface mining rights).

However, there's an important restriction. Your contribution must be to a qualified organization and exclusively for conservation purposes. Otherwise, you won't receive an income, estate or gift tax deduction. Conservation purposes include public outdoor recreation and scenic enjoyment, protection of plant and wildlife habitats, and preservation of historic structures and land.

Giving Real Estate Through Your Will

If making an irrevocable gift of the property through one of the options we've discussed is not to your liking, consider giving it to us in your will. Because your will is revocable (that is, you can change your mind at any time during your life), you will not be able to take an income tax deduction, but the property will not be taxed in your estate.

If you wish, you can give another person life use before unrestricted ownership passes to us. Or you can bequeath full title to an individual if that person survives you, with our organization as the contingent recipient. When an individual is given life use, it is best to make it clear that he or she is responsible for maintenance, insurance, repairs and improvements.

If you don't need to make a new will now for any other reason, ask your attorney to draw a brief codicil for this purpose.

Suitable Property to Donate

Agricultural land tends to return a low percentage of its market value. This is especially true of absentee-owned land, where the owner's profit is often reduced by tenant shares and farm manager's fees. Also, the profitability varies, depending on the weather and commodity markets, making this type of land suitable for a charitable gift in exchange for a life income arrangement.

Real property, such as vacant land, has a cost of ownership (property taxes and insurance, for example) with no offsetting return. And a vacation home that is no longer used enough to justify the investment, costs and responsibilities may be suitable as a gift.

Also, not all property automatically rises in value. An older commercial building in a declining neighborhood may be worth as much to the donor currently, in terms of the charitable income tax deduction from an outright gift, as it is likely to be worth in the future estate. Or it may be used to fund a charitable remainder trust paying an income for life. And developed investment or commercial property may provide significant capital gains tax savings when used to make a gift and avoid potential depreciation recapture as well.

A Summary of the Benefits

A charitable gift of real estate is advantageous for many reasons.

• An outright gift results in valuable income and estate tax deductions, and tax on the capital gain can be avoided.
• A "bargain sale" to us gives you some money back and reduces your capital gains tax exposure.
• A gift in your will assures that the value of the property will qualify for a charitable deduction for estate tax purposes.
• Giving us outright use of the property now will free you from the responsibilities and costs of looking after it.

Find Out More

You create a tangible and enduring testimonial of your interest in our goals when you give your home or other real property. It's one of the most fitting contributions you can make. Your personal satisfaction is complemented by significant tax benefits.

You may have questions about appraisals, tax savings and other details. You'll also want to know which gift arrangement is best for you. We would be happy to assist your attorney and other advisors in designing the most suitable plan for you.