You can make a gift of cash, personal property, real property or securities to be used immediately by the Marianists.
GIFTS OF CASH
The most popular type of charitable gift is a gift of cash. A gift of cash is considered made on the date it is hand-delivered or postmarked and is deductible up to 50 percent of a donor’s adjusted gross income. Any excess deduction can be carried over for five additional years.
GIFTS OF APPRECIATED PROPERTY
A viable alternative to a cash gift is a gift of property. With careful planning, charitable gifts of certain types of assets will provide even greater tax benefits to donors than a cash gift of equivalent value. The most favorable tax benefits are generated by contributions of appreciated, long-term, capital-gain securities and real estate. In addition to receiving a charitable deduction for the full fair-market value of such a gift, the donors escape any potential tax on the capital-gain element of the gifted property. The full fair-market value of gifts of long-term, capital-gain securities or real estate is deductible up to 30 percent of a donor’s adjusted gross income. Any amount in excess of the 30 percent ceiling can be carried forward for five years. Donors considering a gift of property that has decreased in value will be better off selling the property to realize a deductible loss and then contributing the proceeds to the Marianists in order to obtain a charitable deduction. This process assures recognition and deductibility of the loss.
GIFTS OF REAL ESTATE
The Marianists accept gifts of real estate after careful review of the property. Donors may wish to make a current gift of all or a fractional interest in a personal residence, a vacation home, undeveloped land or a commercial property. Such gifts entitle the donors to a federal income tax deduction equal to the fair market value of the property on the date of the gift, provided the donors have owned the property for more than one year. This also permits the donors to avoid capital gains tax on the transfer. Real estate also may be used to fund a charitable remainder trust. For more information, visit our page on charitable remainder trusts.
Donors who want to recover a portion of the value of property that they wish to contribute to charity may consider entering into a bargain-sale transaction with the Marianists. In effect, a bargain sale is a sale of property to a qualified charity for less than its fair-market value. The bargain sale price is any amount mutually acceptable to the charity and the donors. Some donors are willing to sell the property for an amount equal to their cost basis. As such, they recover their investment and get a deduction for the appreciated element. The tax law states, however, that the recovered portion cannot be treated wholly as basis but rather as part basis and part reportable capital gain.
GIFTS OF TANGIBLE OF PERSONAL PROPERTY
As with gifts of long-term, capital-gain securities or real estate, donors are entitled to a charitable deduction for gifts of long-term, capital-gain, for donating tangible personal property (such as works of art, rare books, and stamp or coin collections, etc.). The extent of the allowable deduction for a gift of such property is dependent upon the so-called standard of “related use.” If the use of the contributed property is related to the exempt purposes of the charity, then donors would be entitled to a charitable deduction for the full fair-market value of the property — subject to the 30 percent ceiling and carryover. If the use of the contributed property is unrelated to the exempt purposes of the charity, then the donors would be entitled to a charitable deduction for their basis in the property. When the donors are the creator of the contributed tangible asset, their deduction is limited to the actual cost of producing the asset.
GIFTS OF CLOSELY HELD STOCK FOLLOWED BY REDEMPTION
A business owner who contributes closely held stock to the Marianists will be allowed a charitable deduction for the fair-market value of the stock. As an additional benefit, the donors will escape the potential capital-gain tax on any appreciation in the value of the stock. After the gift is made, the corporation could purchase the stock from the Marianists for cash. This not only enables the donors to retain complete control over the company, but it also makes cash available to the Marianists for their current needs. As long as the Marianists are not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.
Please contact Executive Director of Development Allison Hewitt (314.338.7215) with questions.