American Community Fund Philanthropy
Almost any long term capital gain asset, e.g, marketable real estate (home, vacation property, land, commercial rental property, and other real estate) may be gifted to the American Community Fund.
A gift of real estate would entitle you to a charitable deduction of the full fair market value of the property for up to 30% of adjusted gross income. Excess deductions for gifts of long-term, appreciated real estate may be carried forward for a five-year carry-over period for any excess.
The donor will need to have a “qualified appraisal,” performed by an independent qualified appraiser. The qualified appraisal is required by the IRS for the donor to substantiate the value of the gift and receive a charitable tax deduction. For IRS filing requirements the qualified appraisal must be dated not earlier than sixty days before the date of a gift and not later than the due date for the filing of the tax return.
In summary, the donor has these benefits:
1. The immeasurable satisfaction that comes from making a difference in the lives of people; and making the world a better place;
2. Saving continuing property costs of any vacancies: taxes, depreciation, maintenance, utilities, security, and insurance; and
3. The tax benefit of deducting up to 30% of ordinary income for up to 5 more years, equal to the entire fair market value as determined by the independent qualified appraiser less any amount paid by the charity.
Lifetime Income for Major Donors through the Charitable Gift Annuity
Donors may also consider contributing non-cash gifts such as real estate and other long term capital gain assets and receive a lifetime income. The charitable gift annuity provides a dependable stream of income to the donor as long as they live, as well as several tax benefits.
First, there is an income tax charitable deduction for the calculated benefit to charity. The deduction is based on the net present value of the future gift.
The deduction is available in the first year of the gift and can be carried forward for five additional years if the donor is not able to use the entire tax deduction in the first year.
In addition to the income tax deduction, there is a possible deferral of capital gains tax. Donors who choose to give appreciated property in exchange for their annuity will not realize the immediate gain on disposition that would normally be due upon sale. The capital gains tax will be stretched out over the lives of the income beneficiaries and paid as they receive income. In fact, one of the attractive benefits of the charitable gift annuity is the nature of the income. Effectively, there is the possibility of three different tiers of income with each annuity payment:
Ordinary income, which is the presumed interest rate applied to the gift.
Ordinary income, which is the presumed interest rate applied to the gift.Capital gains tax based on the appreciation of the property over its cost at the time of the gift.
Capital gains tax based on the appreciation of the property over its cost at the time of the gift.Return of capital that is free of tax.
Return of capital that is free of tax.These factors can create a very attractive “after tax” income for some donors.
Further benefits come in the area of estate planning. Assets given to charity are normally out of the estate for estate tax purposes. And though there is a retained income, since it ceases at death it essentially removes the gifted asset from the taxable estate.
Although most estates won’t face federal estate tax because of the current exemption being so high, it is important to remember that many states impose their own estate tax and impose it on far smaller estates.
For more information on charitable gift annuities, call Jim Wootton at (614) 468-0198.
Accomodating Other Nonprofits To
Accept Gifts Of Real Estate
We can also accommodate other qualified 501(C)(3) nonprofit organizations on a charity joint venture basis to receive contributions of non-cash, gift-in-kind real estate or other long term capital gain assets from individuals and businesses. We will then remarket those gratuities for charities unable to accept gift-in-kind donations due to concerns over potential liability, management, or the inability to effectively market the donation to receive the maximum dollar value.
In addition to real estate, items also may include:
Automobiles, trucks, motor homes, boats, aircraft, art, antiques, collections, stocks and bonds, business equipment and other long term capital gain assets.
Jim Wootton, Trustee
American Community Fund
(614) 468-0198
jbw1688@gmail.com
