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Types of Gifts
Cash, usually in the form of a check, is the most common form for charitable gifts. Cash gifts enable you to claim a current income tax deduction of up to 50% of your adjusted gross income in the year of the gift, with a five-year carry-forward if needed. All checks made payable to The Community Foundation of Louisville with the name of the specific fund on the memo line of your check.
A gift of appreciated securities (such as publicly-traded stocks or bonds) can also be used to establish a fund or add to an existing fund. Appreciated securities held for more than one year often provide important tax advantages, as their full market value is generally deductible as a charitable contribution up to 30% of your adjusted gross income. Like gifts of cash, deduction amounts that exceed the limit can be carried forward for up to five additional years.
Gifts of real estate include a gift of a house or other personal residence, farm, commercial buildings, and income producing or non-income producing land. The Foundation accepts most unencumbered real property, which can allow you to contribute more than you may have thought possible. When gifting real property, you can avoid capital gains on the sale of the property and can take a charitable tax deduction for the fair market value of the real property. A qualified appraisal, environmental assessment and preliminary title report are required for this type of gift.
Mutual funds can also be contributed outright to the Foundation to establish or add to a fund. You generally receive a deduction based on the value of the mutual fund at its public redemption price. Completing the gift transaction may take two to six weeks. However in some cases, electronic transfers via wire to a broker are possible, and may be completed within a few days.
Closely held stocks are shares in a privately-owned business. The stock can be contributed outright to the Community Foundation, and you are generally entitled to a deduction for the appraised fair market value, up to 30% of your adjusted gross income. If the claimed value exceeds $10,000 a "qualified appraisal" is required. The Foundation can sell the stock to any potential buyers and is not legally bound to sell the donated shares. Special rules apply to shares of sub-chapter S corporation stock.
Gifts of tangible personal property such as jewelry, artwork, collectibles, antiques, vehicles, and boats may be donated to the Foundation to establish a fund. This type of gift must be evaluated individually by the Foundation for suitability before being accepted.
For a limited time, donors over 70 1/2 years of age can make a gift of up to $100,000 by transferring Individual Retirement Account (IRA) assets to the Community Foundation. When making a gift with IRA assets, you will incur no federal income tax and the assets are no longer part of your estate for tax purposes. Many donors have taken advantage of this limited IRA Rollover to give during their lifetime.
If you name the Foundation as the owner and beneficiary of an existing or new life insurance policy, you receive an immediate tax deduction, which usually approximates the cash surrender value of the policy. All premium payments made by you thereafter will be deductible as a charitable contribution. If you wish to retain control over the policy, you can make a future gift through a beneficiary designation. |
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