ARC of Martin County’s Return on Investment
The ARC is saving taxpayers as much as 33% on every dollar providing higher quality community based services, as opposed to the State providing the services for the individuals in a state institution. If funding cuts continue, many non-profits such as ARC could be forced to close the very programs that operate more efficiently while providing a wonderful quality of life for citizens with disabilities.
More than ever, we need to rely on the generosity of our community to fulfill the critical gap in funding that impacts every individual receiving services provided at the ARC.
Gifts of Cash
Cash or check is probably the most common and popular type of property given. Cash makes a convenient gift for many donors and is easily recorded through canceled checks and receipts. When you itemize your deductions at tax time, your gifts of cash may be deducted in amounts up to fifty percent of your adjusted gross income; any excess can be deducted over the next five tax years.
Cash gifts to the ARC of Martin County have the added advantage of being immediately available to fund services for children and adults with developmental disabilities.
Gifts of Appreciated Securities
Stocks, including mutual funds, many types of bonds, and other publicly traded securities can become substantial gifts at a low after-tax cost. If you have property that has increased in value and you have owned it long enough to qualify as long-term capital gain property, you might consider using such an asset to make a charitable gift.
When you give appreciated property, you may receive a deduction for the full value of the asset, while you avoid the capital gains tax that would have been due if you had sold the property. With capital gains taxed as high as $.28 per dollar of gain for federal tax purposes, this can be a significant savings. You may generally deduct gifts in the form of appreciated property up to thirty percent of your adjusted gross income.
Securities with Decreased Value - When a security has decreased in value, it is often best to sell these and give the cash proceeds. You can then claim the capital loss AND deduct the charitable gift of the cash proceeds of the sale.
Securities with Fluctuation in Value - During periods of stock
market fluctuation, you may own stock that has increased in value, and then experienced a loss. It may still be worth more than you paid. In this case, making a gift of the stock and repurchasing with available cash to establish a new “cost basis” may be the best tax planning strategy. By establishing a new cost basis, in the case of a stock decline, you now have
a capital loss for tax purposes. If it increases, you have less gain to report on a subsequent sale.
Gifts of Real Estate and Other Property
The tax benefits available for gifts of appreciated real estate are similar to gifts of appreciated securities. First, you avoid paying the capital gains tax on the profit. Second, you receive an income tax deduction for the full-appraised value of the real estate.
In addition, you may reserve the right to either live in the property as
long as you live, or during the lifetime of your surviving spouse. Such an arrangement permits a current income tax deduction for a portion of the fair-market value of the property.
Other properties to give include collections of value, works of art, Jewelry, Antiques, and other personal property which may also make practical and meaningful gifts. The amount of your allowable deduction depends on the appraised value of the property and how the gift will be used.
Gifts of Testamentary Bequests
The ARC of Martin County may be named as a beneficiary in your will.
A testamentary bequest is a traditional way to provide for our programs.
This method allows you to retain full use of your gift during your lifetime. Further, depending upon the value of your estate assets, the bequest may qualify as a deduction for estate tax purposes.
There are a number of common forms of bequest. For example, you might consider an outright gift of funds, either a specific dollar amount or a percentage of your estate. Alternatively, the ARC of Martin County might be named as secondary beneficiary to receive the residual of your estate.
Gifts of Life Insurance
Life insurance needs change as life continues. Children become self-sufficient, and in many instances investments provide income and security. After such developments, some life insurance coverage may no longer be needed. One of the simplest ways to receive a tax deduction and leave a significant gift is to name the ARC of Martin County as beneficiary to receive all or part of the proceeds of the policy. There are several methods to make a gift of life insurance; your attorney, accountant or other advisor will tailor an arrangement to meet your estate or financial plan.
Gifts of Life Income Plans
These deferred or planned gifts are ways of making a significant contribution to the ARC of Martin County while providing you with an immediate tax deduction and with income for life. The gift may also be funded with securities or other property.
This may be accomplished by making a gift through a trust arrangement called an “Annuity Trust” or ‘Unitrust.” Through either arrangement you may:
Avoid income tax on appreciated property used to fund the gift
Receive the income earned by the gift for life (may include another designated beneficiary)
Increase income for your family
Defer income until retirement
Avoid gift tax
Reduce estate settlement costs
Charitable Annuity Trust - an Annuity Trust is an arrangement whereby you irrevocably place money or other property with a trustee, with instructions to pay you or someone else income, generally for life. Under an annuity trust, you or a designated beneficiary (or both) receive a fixed sum annually. The amount is agreed upon by the donor and the trustee at the time the gift is established.
The income payments you receive each year will be at least five percent of the amount placed in trust. The size of your tax deduction will depend on your age, payment percentage, and other factors.
Charitable Remainder Unitrust - like the Annuity Trust, the Charitable Remainder Unitrust provides a gift that returns income. Under this arrangement the donor or other beneficiary receives a percentage of the fair-market value of the trust assets. Thus, the income from a Unitrust may rise or fall from year to year.
Additions may be made to this trust, and a tax deduction is allowed, for a portion of each amount contributed. In light of the fact that IRAs and other retirement plans are now limited, the Unitrust might be an alternative to provide for your retirement years.
Charitable Lead Trust - this is essentially the reverse of life income plans; the Charitable Lead Trust pays income from the fund to the ARC of Martin County for the number of years you designate. At the end of the designated time period, the trust terminates and the assets are transferred to the person you name.