Consider Year-End Gifts for Tax Savings and Satisfaction

Charitable gifts are by far the easiest, most flexible way to increase your tax deductions for 2006. Every dollar you give before January 1, 2007, to qualified organizations like ours will be deductible up to 50% of your adjusted gross income. Any excess deductions can be carried over and deducted for up to five years. A $1,000 contribution saves $280 for a person in the 28% tax bracket, $350 for someone in the 35% bracket.

Tax savings are not the reason friends support our mission, of course, but they do enable contributors to do more than they might have thought possible.

Stock Gifts Provide a Bonus

Tax savings can be even higher when you use appreciated securities, held more than one year, to make your gifts. Tax-wise donors know about a benefit in the tax law that permits the following: Mary paid $50 a share for some communications stock a few years ago. Since then, the stock grew to $90 a share. In December 2006 she contributes the stock and deducts $90 a share – not the $50 she paid. And she owes absolutely no tax on her $40-a-share long-term capital gain.

This strategy has been the foundation for some of the most important gifts we have ever received, and it works for both appreciated securities and real estate. It’s a gift technique that lets donors do far more to assist us than if they simply wrote checks.

If you own securities that have gone down in value, sell the stock first and give us the proceeds. You'll receive double deductions: one for the gift and another for a capital loss. Note: Gifts of securities may be deducted up to 30% of your adjusted gross income, with a five-year carryover for excess deductions.

Remember that the date of delivery of gifts to charitable organizations is the test of whether a gift will be deductible for 2006. A check will be considered delivered, however, on the date you mail it – even as late as December 31, 2006. The same rule applies when you mail securities in the proper form (with a stock power mailed separately).

Special planning is needed when contributing stock that is owned in “street name.” If you do not possess the stock certificates and intend to give stock near year's end, have your broker contact our office immediately so we can assure the gift is completed in 2006.

Good Results with Mutual Funds

Mutual fund shares can be contributed with the same beneficial effect as listed and actively traded stock. Thus, mutual fund shares bought by you eight or ten years ago – though they may be worth three or four times your original cost – can be given without incurring any capital gains tax. Your deduction is the “net asset value” of the shares, which is calculated each day, generally after the close of the stock market. If you decide to contribute mutual fund shares, please notify us as soon as possible and send us a copy of your mutual fund statement. Transfers can take from two to six weeks to accomplish, and we will need to work with you and your account manager to make the gift effective for 2006.

We Can Help Plan Your Gift

Please call if you are interested in giving securities. All you need are investments that have risen in value and have been owned by you for more than one year – and a desire to support our mission.

Exceptional charitable giving opportunities also exist if you own a life insurance policy that is no longer needed for the security of your family, or closely held stock. Business owners also can direct their C corporations to make charitable contributions that satisfy their personal giving objectives. No adverse tax consequences will occur, so long as there is no economic benefit to the business owner.

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