When your client
says:
“I
want to sell appreciated property, but
I'm concerned about capital gains taxes.”
Giving all
or part of the asset to charity will eliminate
or reduce capital gains taxes and can replace
less efficient charitable giving, continue or begin
to provide lifelong income, and/or provide satisfaction
about supporting a charity of one's choice.
“I'll
be receiving additional taxable income this
year. I'd like to give some to a charity,
but I'm not ready to decide which one.”
A donor-advised fund will lock in a tax deduction
for the current year and allow as much time as
is needed to choose the charitable recipients.
“I manage
a rental unit which provides needed income,
but it's too much work.”
Giving the
rental property to charity and
setting up a charitable remainder trust
(CRT) may eliminate the capital gains
tax, secure lifetime income (perhaps
more than from the rental), claim a sizeable
tax deduction, and support a favorite
charity.
“I have
a large retirement fund but my children
will only receive 20 or 30 cents on the
dollar.”
Giving the
retirement fund to an endowment from
which heirs may recommend charitable
gifts will reduce estate taxes, eliminate
income tax on the IRA distribution, and
create a family legacy. In
the meantime, other assets can be used
for gifts to family members.
“I have
no children, and it's time to write a will.”
How do they want to be remembered? Suggest a charitable
fund at the Foundation as a way to be remembered
and also as an alternative to paying too much estate
tax.
“I'd like
to help a long-time employee (or friend,
sibling, or parent).”
A life-income
gift, such as a Gift Annuity, will
assure the friend a lifetime income --
and allow your client to support a favorite
charity following the friend’s
death.
& when
your client has specific situations to resolve:
1. Year-End Tax Planning
Situation: Your client just earned a large bonus
and wants to give a portion back to the community,
but has not time to decide on the most deserving
charities.
How
to use the Community Foundation: Recommend
establishing a Donor Advised Fund through the
Oak Park-River Forest Community Foundation for
an immediate income tax deduction and the ability
to stay involved in recommending uses for the
gift for years to come.
2. Estate Planning
Situation: Estate planning identifies significant
taxes going to the IRS, but your client want
to direct dollars for local benefit.
How
to use the Community Foundation: The Foundation can
work with you and your client to reduce
his/her taxable estate through a charitable
bequest or other planned gift. Your client’s
gift will create a legacy of caring in the
community that stays true to his/her charitable
intent forever.
3. Retirement
Situation: Your client is concerned about running
out of money during his/her lifetime but has
always been charitable.
How
to use the Community Foundation: Recommend establishing
a life income gift (such as a charitable
remainder trust) at the Foundation that
pays income potentially for life. Upon
your client’s
death, the gift can be distributed by the Foundation
in accordance with his/her charitable interests.
4. Private Foundation
Situation: Your client is thinking about establishing
a private foundation but is looking for a more
cost-efficient, simpler way.
How
to use the Community Foundation: The Foundation
can help you and your client analyze the pros
and cons of creating a Donor Advised Fund versus
a private foundation. Creating a Donor Advised
Fund allows your client to earn returns on their
investment, make grants in the community and
receive income tax deductions without having
to deal with the legal and administrative burdens
of a private foundation.
5. Highly Appreciated Stock
Situation: Your client has appreciated stock
and wants to use a portion of the gains for charitable
giving, but the identified charities are too
small to accept direct stock gifts.
How
to use the Community Foundation: Suggest
establishing a fund at the Foundation with a
gift of appreciated stock. Your client receives
a tax deduction on the full market value, while
avoiding the capital gains tax that would otherwise
arise from sale of the stock. Your client can
even be involved in recommending uses for the
gift, including the organizations that he/she
cares about most.
6. IRA/401(k) Assets
Situation: Your client wants to leave his/her
estate to community and family and has substantial
assets in retirement accounts.
How
to use the Community Foundation: The Foundation
can help you and your client evaluate the most
beneficial asset distribution to minimize taxes,
giving more to her/her heirs and preserving charitable
intent.
These are just
a few of the ways the Foundation can provide
solutions for your clients. Foundation staff
is always available to discuss your client’s
specific needs. Call us at 708-848-1560, 9
a.m to 5 p.m., Monday through Friday.
