Your gift, regardless of how you ultimately choose to make it, will make all the difference in the success of the “BETTER TOGETHER” Campaign. In return for financial support, you may take comfort and satisfaction in the knowledge that your generosity will directly benefit the lives of others. Please join neighbors, friends, local churches, the people of Northeast Kansas and others with your own commitment to the “BETTER TOGETHER” Campaign. All gifts are tax deductible and the Northeast Kansas Foundation for Aging Services is recognized as a fully–qualified, not-for-profit organization under the current statutes of the Internal Revenue Code.

IT’S YOUR DECISION!

The “BETTER TOGETHER” Campaign has established a $1.25 million goal. When a donor makes a gift to the Campaign, the funds are placed in a restricted account until they are used for the BETTER TOGETHER projects as explained in the accompanying literature.

GIFTS OF CASH AND CASH PLEDGES

Gifts of cash may be mutually beneficial, providing funds for BETTER TOGETHER projects and tax savings for you. Pledges covering a period of three-to- five years are most welcome since the campaign goals and objectives are expressed over this timeframe. Some donors may wish to consider longer or shorter arrangements. Flexibility is key.

GIFTS OF STOCK AND OTHER SECURITIES

Appreciated stocks, bonds, U.S. Treasury notes and bonds, and mutual funds make excellent gifts to the BETTER TOGETHER Campaign, at the same time resulting in additional tax savings for you. Contribute securities that have increased in value and avoid capital gains tax that is incurred when you sell appreciated assets. You’ll also get a charitable tax deduction for the full market value of the assets, regardless of what you paid for them.

GIFTS PLANNED OR DEFERRED

A bequest in your will or a living trust can be an effective way of making a gift to the BETTER TOGETHER projects while reducing the taxable portion of your estate. Whatever your goals or financial situation, planned giving offers a number of options from which to choose. The following pages offer some ideas of how to plan a gift that’s right for you. Please understand this information Is not a substitute for advice from our professional planned-giving staff or your own advisors.

As you consider your options, remember that everything you own may be subject to federal estate tax. Charitable deductions allow you to deduct every dollar you give to charity through an outright bequest. Also, property placed in a charitable trust generally will not be subject to federal estate tax when the donor dies.

Example: giving stock vs. cash to the “BETTER TOGETHER” Campaign.

YOUR PATH TO THIS GIFT

You’re considering an outright gift made during your lifetime. You’re holding stocks that have risen in value. You want to maximize your deduction but not affect your cash flow. The most common appreciated asset, and the easiest to donate, is marketable stocks and bonds. The IRS still offers you a notable tax break for charitable gifts : you may deduct the full, fair market value of appreciated assets that you give us, and also avoid capital gains liability on the transfer. This means that you can leverage a larger donation if you use an appreciated asset to make your gift instead of cash.

HOW YOU CAN GIVE MORE WITH APPRECIATED STOCK VS. CASH

Suppose you purchased 2,000 shares of Company X stock at $10 per share and it is currently worth $50 per share. You have been considering making a generous gift to the Northeast Kansas Area Foundation for Aging Services, and now you are trying to decide the best strategy. Remember that in addition to receiving an income tax deduction for the fair market value of the gift, giving appreciated securities allows the donor to avoid the capital gain that would have been realized had they sold the asset instead. Assume 35% federal income tax and 15% capital gains tax.

	Giving Cash	Giving Stock
Charitable Gift	$100,000	$100,000
Capital Gains Tax Saved	$ -0-	$ 12,000
Income Tax Savings	$ 35,000	$ 35,000
Net Cost of Gift to You	$ 65,000	$ 53,000

So by giving appreciated securities, the net cost to you is $12,000 less and you have essentially made a $100,000 gift to the Foundation with the $20,000 you originally invested in purchasing the stock.

Many of our donors are also surprised to find that they can often give more to the Northeast Kansas Foundation for Aging Services through stock gifts with the same net cost as that of a cash gift.

Assume the same parameters from the previous example including a 35% federal income tax and 15% capital gains tax. In this case, by giving stock rather than cash, you could increase your gift to the Northeast Kansas Foundation for Aging Services by over 22% or $22,642.

	Giving Cash	Giving Stock
Charitable Gift	$100,000	$122,642
Capital Gains Tax Saved	$ -0-	$ 14,717
Income Tax Savings	$ 35,000	$ 42,925
Net Cost of Gift to You	$ 65,000	$ 65,000

 

Answers to the most often asked questions:

• How will your gift of stock be valued? It’s the average of the high and low prices for the stock on the date of the transfer to us. If the high bid was $80 and the low was $70 on the day you made your gift, your deduction will be $75 per share.

• When is your gift complete? If your stock is held by your broker, it’s the date the shares reach our account. If you hold the stock yourself and mail it to us, it’s the postmark date on the envelope.

• How should you transfer securities to us? After consulting with your legal and/or financial counsel, please contact the Foundation’s Executive Director for the instructions and forms you will need to complete the transfer.

• Can you deduct the full amount of your gift? Yes, within this limitation: the IRS says that you can deduct gifts of appreciated assets up to 30 percent of your adjusted gross income (‘AGI’—the figure at the bottom of the first page of Form 1040). Thus, if your AGI will be $100,000 this year, you will be able to deduct up to $30,000 in gifts of stock. A gift in excess of the 30 percent amount is not wasted, however, because the IRS allows you to carry forward excess deductions through the five tax years following the year of your gift.

Note that the IRS allows cash gifts to be deducted up to 50 percent of adjusted gross income. Therefore, the deduction for a large gift of appreciated assets could take longer to claim than the deduction for the same gift made in cash. But if the donated assets had a small cost basis, they could still be more tax-efficient to use than cash.

CONSIDER THE BENEFITS

Benefits vary depending on the gift you choose, but most options offer:

• Immediate federal income tax deduction for all or a portion of the value of your gift.
• Elimination of capital gains tax at the time of transfer, if the asset is in the form of real estate or securities that have appreciated in value.
• Increased financial security for you or your heirs while providing meaningful support for a valuable community resource.
• Income for life paid to you and/or another beneficiary, such as a spouse or other family member.
• Increased income if a gift is made to a life income plan that produces a higher yield than the donated asset (often the case with securities).

 

Contact us to create a plan that makes your gift work for you!

The Better Together Campaign

Karen Wilson,
Executive Director

Northeast Kansas Foundation for Aging Services
1803 Oregon Street Hiawatha, KS 66434

785-742-7152
email: nekaaa@nekaaa.org