CHARITABLE INTERESTS
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 will be receiving additional taxable income this year. I
would 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
is 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 is 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 would 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 death of the
annuitant.
& 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. This 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 the death of your client, 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 the specific needs of yoru client. Call us at
708-848-1560, 8 a.m to 6 p.m., Monday through
Thursday.
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