Charitable Giving Brochure

As you review your year-end tax planning, we hope you will consider making good use of the income tax charitable deduction. Your 2007 year-end gift to Toledo Area Ministries may significantly reduce your income taxes, while providing meaningful support for the people who benefit from the ministries/programs of TAM. Thank you in advance for your consideration both now and in the future.

This brochure is a brief introduction to some of the best tax-advantaged methods of giving. We would be pleased to provide you additional information and we also urge you to discuss your tax planning with your accountant or other profession advisor, as the benefits of any charitable giving option will depend upon your personal tax situation.

“No matter what your income level, if you itemize your deductions, you can almost always lower your income taxes through charitable giving.”

 Gifts of Cash

If you itemize, you can lower your 2007 income taxes by writing and mailing TAM a check by December 31, 2007 . There is no easier way to garner a 2007 year-end charitable deduction and support the ministries/programs of Toledo Area Ministries. Make sure your envelope is postmarked by December 31; if it is your gift will qualify as a 2007 gift.

Please check with your employer they may have a gift matching program. If your company or firm has a matching gift program, simply enclose the form along with your check, or let us know and we will be happy to follow up.

Gifts of cash are fully deductible – up to a maximum of 50% of your adjusted gross income. For example, if your adjusted gross income for 2007 is $100,000, up to $50,000 of charitable gifts may be deducted in 2007. Any excess can generally be carried forward and is deductible over as many as five subsequent years.

Gifts of Stock

If you own stock (for more than one year), it is almost always more tax-wise to contribute the stock that has appreciated in value rather than cash. This is because a gift of appreciated stock generally offers a two-fold tax savings. First, because TAM is a charitable organization, when you make a stock gift, you avoid paying any capitol gains tax on the increase in the value of the stock you transfer to TAM. Second, you receive an income tax charitable deduction for the full fair market value of the stock at the time of the gift.

EXAMPLE: If you purchased some stock many year ago for $1,000, and it is now work $10,000, an outright gift of the stock to TAM would result in a charitable contribution deduction of $10,000. In addition, you pay no capital gains tax on the $9,000 of appreciation.

The same charitable gift rules apply to mutual funds as well. Due to the complexities involved in the transfer of mutual funds shares, we encourage you to begin the giving process well before December 31, 2007 .

Gifts of Real Estate

If you have owned your residence, vacation home, office building, acreage, farm or vacant lot for many years, a charitable gift of that real estate can be especially tax advantageous.

The property may have so appreciated in value through the years that its sale would mean a sizeable capital gains tax. By making a year-end gift of this property to TAM instead, you avoid the capital gains tax and at the same time qualify for a fully deductible contribution equal to the property’s fair market value.

It is also possible to make a gift of your home or vacation home so that you and, if applicable, your spouse can continue to live in the house for your respective lifetimes. This arrangement will also qualify as a 2007 contribution, deductible up to the residual value of the home.

Gifts of Tangible Personal Property

Do you have a coin, stamp or baseball card collection that you no longer wish to maintain and in which the children have expressed no interest? Has someone left you some artwork, but it is not quite your style? Do You have a car, boat, motorcycle, camper or other type of recreational property and you’re thinking about getting rid of? Depending on the type of personal property, how you acquired it, how long you have held it, and when you plan to gift it, giving personal property may be a wonderful and often overlooked way to contribute to TAM. Please contact us for more information.

Life Insurance Policies & Retirement Plans

In August of 2006, President Bush signed into law the Pension Protection Act. Included in this new legislation is a provision for tax-free distributions from IRS’s to qualified charities such as TAM through December 31, 2007 . Donors must be at least 70 ½ years old and distributions are limited to $100,000. All charitable distributions count toward required minimum distributions. The distribution generates neither taxable income nor a tax deduction, so even if a donor does no itemize his or her tax return, they receive the benefit. If you want to take advantage of this YOU MUST DO IT THIS YEAR!

You can make TAM the owner and beneficiary of an insurance policy or a beneficiary of your retirement plan at your death. It is easy to accomplish this objective by asking your life insurance agent or plan administrator for the appropriate forms. Please note: retirement assets are the most heavily taxed asset at death in your portfolio and make and excellent gift choice.

Charitable Gift Annuities

A Charitable Gift Annuity (CGA) is an agreement between you and TAM Foundation in which you transfer assets to TAM Foundation in exchange for fixed payments for life. Upon your death, the remainder of the annuity is transferred to TAM. The guaranteed payment rates begin at 6.0% for people age 65 and go up to 11.3% for those 90+.

Charitable Remainder Unitrusts

Charitable Remainder Unitrusts (CRUT’s) are another tool donors use to make substantial gifts to charity. They act much like gift annuities but are much more flexible.

Here’s and example: Jerry created a CRUT funded with $100,000 in appreciated securities. He was able to convert a low-yield investment into an ongoing source of income, avoid up-front capital gains tax, secure a generous income tax deduction and make a major gift to support TAM. The trust pays 5% of its value each year for the rest of Jerry’s life. What’s more, Jerry paid no capital gains tax on the gift of stock or the later sale of the stock by the trustee. Falling in the 35% marginal tax bracket, Jerry will receive a substantial income tax deduction for a portion of the gift.

Philanthropic Funds

Do you want to make a charitable gift at year-end but are not quite sure which organizations you wish to support at this time? Is your advisor suggesting you bunch your contributions this year but you don’t want to disappoint your favorite charities next year?

You can solve these dilemmas by establishing a philanthropic fund at the TAM Foundation. A philanthropic fund is a named donor advised fund of the TAM Foundation. As the donor, you retain the privilege to make non-binding recommendations to the Foundation for charitable grants to be made from the fund. You can create a philanthropic fund by making an irrevocable gift of cash, securities or other property to the TAM Foundation. You can receive an immediate income tax deduction for the amount of the initial gift and on each subsequent gift to the fund. The fund is invested and no tax is paid on the income generated by the fund You make charitable grant recommendations from both income and principle. A philanthropic fund may be established with a minimum gift of $100. For more information contact us.

“Giving away money is easy. Deciding whom to give it, how much, when and how, is not” - Aristotle

 For more information about planned giving and/or year-end charitable giving please visit our web site; tamohio.org