MORE INFORMATION FOR ADVISORS 

The following is provided for donors and their advisors who would like more details about some of the giving ideas introduced in this Web Site.

A Note For Non-Itemizers

In order to receive maximum income tax benefits from your charitable gifts, you must be in a position to itemize deductions on your income tax return. What if you don’t have enough deductions to qualify to itemize in a given year? By combining more than one year’s charitable gifts and other deductible expenditures into a single tax year, you may be able to boost your total deductions over the minimum amount required in order to itemize. As a result, it may be possible to reap a tax benefit from otherwise non-deductible charitable gifts and other expenses (such as property taxes on a home).

Carrying Over Excess Deductions

If you give more than the deductible limits for gifts in any one year, you may “carry over” any remaining deductions to be used in as many as the next five tax years.

Giving Appreciated Property

Property that has increased in value and been held for the long-term holding period defined by law (one year and a day as of July 1999–check for current long-term holding period) is generally deductible for its current market value up to 30% of your adjusted gross income. Exception: Tangible personal property (art, antiques, collections, jewelry, for example) is deductible at full present value only if it is used by Hope in the furtherance of our tax-exempt purpose. If not (for example, if it is to be resold immediately), your deduction is generally limited to the original price paid for the property or its current value, whichever is lower.

Appraisals. To claim a deduction for certain gifts of non-cash property, you will need to obtain a qualified appraisal for income tax purposes. A “qualified appraisal” is required when non-cash property gifts have a claimed value of more than $5,000 ($10,000 for gifts of closely held stock). Exception: Publicly traded securities, such as stocks and mutual funds. See IRS Form 8283 for details.

Gift substantiation rules. For all gifts of $250 or more, donors must now have a written acknowledgment and retain it with their tax records. Such acknowledgment information should be found in letters provided you after your gift has been received. Therefore, it is more important than ever to keep any such letters among your records. You may risk having a deduction disallowed if you do not have proper substantiation.

Guidelines For Drafting Charitable Trusts

In order to qualify for tax benefits, charitable trusts should be drafted by an attorney (as should any legal document, such as a will).

To aid drafters of charitable remainder trusts, the IRS has issued specimen provisions to be included in the trust agreements. Many of these can be found in Rev. Proc. 2003-53 through 2003-60 and Rev. Proc. 2005-52 through 2005-59. Specimen forms for charitable lead trusts are available from research sources. Charitable trust forms that are preferred by particular fiduciaries are also typically available from them upon request.

Where Do I Go From Here?

Please contact us so we help you and your financial and estate planning advisors explore giving methods that best fit into your plans.

We also encourage you to discuss any gift you may be considering with family members or other personal advisors. Such persons can often help you make a well-reasoned choice.

Please us contact at 901-682-6201

Bbrazley@hopeccf.org