A Guide to Tax Benefits
“Train a child the way he should go, and when he is old he will not turn from it” Proverbs 22:6
Gifts of Cash
Gifts of cash are fully deductible up to a maximum of fifty percent of your adjusted gross income. Some employers will match charitable gifts, making your gift worth even more. If your company has a matching gift program, simply enclose the form along with your gift, in an envelope that is postmarked by December 31.
Gifts of Stock
If you own stock*, it is almost always to your advantage to contribute stock rather than cash. Giving long-term appreciated stock offers you a potential three-fold tax savings. 1.) You avoid paying capital gains tax on the increase in value of your stock. 2.) You receive a tax deduction for the full fair market value of the stock on the date of the gift. 3.) You receive a reduction in the value of the donor’s taxable estate by the amount of the gift. *The stock must be long-term, owned for at least one year and one day.
Life Insurance
Do you have a life insurance policy that you no longer need? Policies that are paid up may be deductible as gifts approximately equal to the cash value. Policies that still require premium payments can also be used to make a gift. The annual premiums are tax deductible each year that you continue to pay them.
Real Estate
A residence, vacation home, farm, acreage, or vacant lot may have do appreciated in value through the years that its sale would mean sizeable capital gains tax. Before you sell, consider donating the property to Emmanuel. You will avoid the tax and receive a tax deduction for the full fair market value of the property. It is also possible to make your gift so that you and your spouse can continue to use the property for your lifetime—while you receive the tax deduction this year.
Life Income Gifts
If you are considering a major gift, a “life income” gift may be an excellent year-end gift. Or you may find yourself in a position of holding assets that would make a meaningful gift in the future, but may presently need them to meet your needs or anticipated future needs. Placing these assets into a “Charitable Gift Annuity”, “Charitable Remainder Trust” or “Charitable Remainder Annuity Trust” would provide income for you and perhaps a specified beneficiary for life, after which the assets would be distributed to Emmanuel. Tax benefits include an initial income tax deduction and avoidance of capital gains tax. When you make a life income gift, you experience the joy of an excellent charitable gift while securing an income for the rest of your life and the life of your spouse.
Bequests
While you consider your annual income tax savings, this may also be an appropriate time to consider your long-term tax savings. Charitable bequests remain a popular way for many people to ensure their giving for future generations. The federal estate tax can still take approximately fifty percent of one’s estate at the time of death. We hope you will consider a charitable bequest in your will by specifying Emmanuel Christian Academy receive one of the following:
1.) a dollar amount,
2.) a percentage of your estate,
3.) a residual beneficiary (that which is left after all other beneficiaries have received their bequests).
We would be pleased to provide you, your attorney, your accountant or your tax or financial advisor with additional information and assistance. The information in this brochure is general in nature. You should contact your own professional tax advisor to learn how this information relates to you and your individual circumstances. Thank you for your prayers, your interest and your continued support.
For more information, please contact Dr. Dan Bragg, Superintendent, at 937-390-3777, or by e-mail at dbragg@ecaoh.com.