A Trinity Foundation Gift Idea
There is a silver lining from the recent government bailout which favorably affects Not-for-Profit organizations like the Trinity Foundation. As you may recall, tax-free treatment of distributions from IRAs, where the distributions are donated to charity, were allowed under the Pension Protection Act of 2006, and applied to distributions made in tax years 2006 and 2007. Under the recently passed 2008 Extenders Act, the tax-free qualified charitable distribution rules are extended to apply to distributions made in tax years beginning after December 31, 2007 and before January 1, 2010 (calendar years 2008 and 2009). Taxpayers, age 70 ½ or older, may exclude from gross income up to $100,000 of their qualified charitable distributions.
Although tax-free IRA distributions to the Trinity Foundation cannot be deducted as charitable contributions, the distributions do count toward satisfying your required minimum distribution for the year. Please consult with your personal tax accountant or financial planner before IRA distributions are made, as certain rules do apply. Contact Wade Stinnette (803-790-5800) or John Moorman (803-790-6656) for further information.
This is great news for the Trinity Restoration Campaign!
Won’t you consider making a gift to your Cathedral’s restoration?
Did you know that using appreciated securities to make your gift delivers more tax benefits to you than using cash?
Use Appreciated Assets for Your Gift
While most donors use appreciated stock to gain this tax advantage, the same benefits apply to other assets, such as shares in privately held companies, real estate and artwork. However, additional IRS regulations govern such gifts, and they must meet Trinity Foundation's gift acceptance policies.
Here's how to transfer securities to the Trinity Foundation: Have your broker contact Vickie Hanks, Financial Administrator at 803-771-7300 to arrange the transfer to the Foundation's account. Your charitable deduction will be valued as of the date the securities reach our account. If you hold the shares yourself, mail them and, in a separate envelope, a stock power in blank, to Vickie Hanks, 1100 Sumter Street, Columbia, SC 29201. Your charitable deduction will be valued as of the postmark date on your envelope transmitting the securities.
I'd like to know more about giving appreciated assets to Trinity Foundation.
Include Trinity Foundation in your Estate Plan
A gift to Trinity Foundation in your will or revocable trust proclaims your confidence that the Cathedral will continue to pursue its mission and make a difference for future generations. A bequest is easy to arrange, does not affect your assets or cash flow during your lifetime, and is revocable.
A bequest can deliver a specific dollar amount, or a percentage of the balance remaining in the estate after taxes and specific bequests have been paid. Your bequest or trust distribution to the Foundation will reduce the taxable value of your estate for federal estate tax purposes, and is exempt from state inheritance taxes.
Suggested Text for a Bequest:
I bequeath Ten Percent (10%) of the residue of my estate to the Trinity Foundation, a non-profit corporation located in Columbia, SC, to be added to the Endowment Fund.
I'd like to know more about making a bequest to the Trinity Foundation.
Add Life Insurance to your Giving Ability
Donors often overlook the benefits of giving a life insurance policy to theTrinity Foundation. A parishioner carrying more insurance coverage than his family obligations now require can find a hidden gift asset in a surplus, paid-up policy. A younger member can create a significant future gift by taking out a new policy on her life and naming The Foundation as the owner and beneficiary. You can contact Read Folline at Merrill Lynch, 733-2915, for details on transferring a policy to the Trinity Foundation.
A gift of a paid-up insurance policy produces a charitable deduction in the amount of the cash surrender value of the policy. A donor securing a new policy, naming The Foundation the owner and beneficiary, may deduct her gifts covering the Foundation's premium payments.
I'd like to know more about giving Life Insurance to the Trinity Foundation.
Make a Gift that Pays you Back
The Foundation offers gift plans that return income payments to our donors. Parishioners can make a significant gift and still retain benefits from the assets they have given us. Income may be paid to the donor for life, or may be directed to a friend or family member. After the beneficiary's death, the balance remaining in the gift account is applied to the Foundation Fund chosen by the donor.
If the donor uses appreciated assets to make such a gift, no upfront capital gains tax is applied to the transfer, so that the entire value of the asset can be put to work earning income for her. In addition, the donor receives an income tax deduction based on the full fair market value of the gift, reduced by the present value of her retained income interest.
The two most popular life-income gifts we offer are:
The Charitable Gift Annuity is a simple contract providing for the Foundation's payment to the donor (and an optional second beneficiary) of a fixed income for life in return for a contribution. The gift annuity offers donors the assurance of an income that will not fluctuate, a modest minimum gift of $10,000, and payments that are secured by all the assets of the Trinity Foundation. As an additional tax benefit, part of each income payment to you from the gift annuity will be treated as the tax-free return of principal. In addition, if you funded your gift annuity with appreciated securities, a further portion of your income will be taxed at capital gains rates (20%).
These tax reductions increase the effective yield of the gift annuity, and they are not available with other types of life-income gifts. (The IRS provides that these benefits are in effect during your life expectancy -- if you live longer, the entire gift annuity payment will be taxed to you as ordinary income.)
The Charitable Remainder Unitrust is an individually managed trust paying the donor and/or other beneficiaries income as a fixed percentage of the unitrust's principal. The unitrust is revalued annually, and income in excess of the percentage payout is reinvested. Thus, the value of the unitrust, and future income payments, are projected to grow over time. A unitrust can address a variety of the donor's financial objectives. It may be structured to invest solely for growth for a term of years, an attractive way to help provide for future retirement or tuition needs while also making a substantial gift to Trinity Foundation. The unitrust may pay income to multiple beneficiaries, and may be structured to accept gifts of assets that are temporarily illiquid, such as real estate or a family business. The donor, his financial institution, or the Foundation may serve as the trustee of a unitrust. The Foundation currently asks for a minimum gift of $100,000 to establish a unitrust here.
The Charitable Lead Trust generates income for the Trinity Foundation now, while reducing the tax cost of transferring assets to the next generation. The lead trust holds gift assets for the donor’s lifetime or for a term of years, and pays annual income to the Foundation. The Foundation benefits from the assured income stream from the lead trust, while the donor’s family enjoys several tax advantages:
• The gift assets placed in the lead trust are frozen in value for transfer-tax purposes as of the date the trust is formed. When the trust terminates and the assets pass to the donor’s family, all intervening appreciation escapes gift or estate tax.
• Trinity’s income interest further reduces the taxable value of the assets when they pass to the donor’s family. This feature makes the lead trust especially useful to donors holding assets that are likely to appreciate significantly before they are transferred to the next generation.
• The lead trust is a creative giving vehicle tailored for individuals whose primary planning concern is capital preservation. As it helps achieve that goal, the lead trust also delivers a welcome stream of income to the Cathedral.
