October 22, 2007

Giving Thanks at Year End

There are many ways in which Saint Clare’s can benefit from your generosity. Also, by planning your charitable gifts now – and completing them by December 31 – you may enjoy the satisfaction of giving while increasing your tax refund or reducing the taxes you would otherwise owe in April 2008.

Multiply Tax Savings: Federal laws and those of many states make it possible to reduce or eliminate gift, estate, capital gain and income taxes on funds you give for charitable purposes. Since funds used to make charitable gifts are removed from the amount otherwise subject to federal income tax when you itemize your deductions, you may be able to give more than you thought possible.

Gifts of Cash: All gifts received by Saint Clare’s Foundation by December 31 qualify for tax deductibility for 2007. Through gifts of cash, it is possible to eliminate income tax on up to 50% of your taxable income. Larger gifts may result in tax savings in as many as six tax years. Remember, the higher your tax bracket, the more you save.

IRA Rollover: For this year only (ending December 31), donors who are 70 ½ or older may roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. An individual may exclude up to $100,000 from his/her gross income for each tax year for qualified charitable distributions from IRAs.

Securities: Gifts of stocks, bonds and mutual funds that have increased in value since you owned them can result tax savings. If you have held such assets for longer than a year, you can gift them and deduct the entire value, including “paper profits” form your taxable income. If you have investments that have decreased in value, consider selling them before December 31 and making a deductible gift of the cash proceeds. This creates a loss that you may be able to deduct from other taxable income along with your cash contributions. The amount of your deductible loss combined with the charitable deduction may actually amount of more than the current value of the investment.

Capital Gains: Congress has also provided that in addition to regular tax savings, capital gains tax is not due on assets given to charity. Gifts of appreciated assets can serve to reduce tax on up to 30% of your adjusted gross income. The best assets to gift are those that have increased the most in value and would result in the greatest capital gains tax if sold.

Wire Transfers: Saint Clare’s Foundation can work with your financial consultant or broker to arrange for the electronic transfer of securities as gifts. The stocks, bonds or mutual funds are sold the day they are transferred and their value that day becomes the amount that you can deduct.

As with all financial matters, please consult your tax advisor before making any charitable deductions so that you may fully understand the tax implications of your gift.

Leaving a Legacy: The end of the year is a wonderful time to review your long-range estate and financial plans. Wills, life insurance, retirement accounts, and other planning vehicles frequently offer exceptional opportunities for leaving a lasting legacy to charitable interests such as Saint Clare’s Foundation. Recent tax law changes have resulted in lower estate and gift taxes for many Americans, leaving more assets available for charitable gifts.

To learn about other ways to provide for meaningful future gifts while enjoying immediate income tax savings and other benefits today, click here.

For more information, please contact Saint Clare’s Foundation at (973) 983-5300.

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