Ways to Give: Annual GivingMorrisville College Foundation
Gifts of Cash
If you itemize, you can lower your income taxes simply by writing us a check. Gifts of cash are deductible up to 50% of a donor's adjusted gross income. For example, if your adjusted gross income for this year is $40,000, up to $20,000 of charitable gifts may be deducted on this year's tax return. Any excess can generally be carried over five years.
Because of the charitable deduction, the net cost to the donor will be lower than the face value of the gift. For example, the net cost of a $1,000 cash gift to a donor in the 35.5% marginal tax bracket is only $645 (rates may vary).
Gifts of stock or securities
It is often more tax-wise to contribute stock than cash because giving appreciated stock usually offers a two-fold tax saving. Generally, if you have held the stock for over one year, you avoid paying capital gains tax on the increased value of the stock, plus you receive an income tax deduction for the full fair market value of the stock at the time the gift is given. Gifts of appreciated stock are fully deductible to a maximum of 30% of your adjusted gross income.
For example, Mr. Smith is in the 35.5% income-tax bracket contributes securities to Morrisville State College that he purchased several years ago for $5,000. They currently are valued at $20,000. He realizes a $20,000 charitable deduction that saves him $7,100 in income taxes (35.5% of $20,000). In addition, Mr. Smith avoids the potential capital-gain tax on his $15,000 profit for further savings of $3,000 (20% of $15,000). Therefore, the net cost of Mr. Smith's gift of $20,000 is only $9,900 when allowing for federal tax benefits. Any excess can generally be carried forward and deducted over as many as five subsequent years.
If you qualify, the gift may be deducted up to 50% of your adjusted gross income with the same five year carry forward of any excess amount.
For stock regularly traded on a stock exchange, the charitable deduction is determined by using the average between the high and low price on the date of the gift. For over-the-counter stock, use the average between the closing bid and asked prices on the date of the gift.Call us for in- structions on stock transfer. Do not sell the stock.
Gifts of real estate
A residence, farm, vacation home or vacant properties may also be particularly advantageous from a tax point of view. They may have so appreciated in value through the years that their sale would mean paying a sizeable capital gains tax. By making a gift of real estate, you would avoid the capital gains tax while also receiving a charitable deduction for the full fair market value of your property established by an appraisal.
It is also possible to make a gift of your home, farm, or vacation home so that you and your spouse can continue to use it for your lifetimes while you receive a current income tax deduction.
Bequests: gifts through your will
You can provide for the College by simply modifying your current will (called adding a codicil) or by writing a new will. You control the final purpose of your assets. An endowment fund for a scholarship can be established in perpetuity in your own name or in honor or memory of another person with a bequest of $10,000 or more. You will have the satisfaction that you have provided something special to ensure Morrisville's future for generations to follow. When providing for a scholarship through a bequest, it is very important to name the Morrisville State College Foundation, Inc. as beneficiary.
Gifts of life insurance
Life insurance provides another excellent means for making a charitable gift with the resultant deduction. You can purchase a new policy or donate one that you currently own but no longer need. When you designate us as both the owner and beneficiary of the life insurance policy, you earn the deduction of the current cash value of the policy. If you decide to continue paying the premiums on the policy after the gift is made, these additional premium payments will be tax deductible each year up to your maximum charitable deduction amount.
Life income gifts
(How to increase your income, receive a charitable contribution deduction & avoid capital gains taxes.) If you own stock that is providing low dividends, maybe 2% or 3%, a "life-income" gift may be appropriate. You could transfer the stock to us and establish a "charitable remainder unitrust" or "charitable remainder annuity trust" that would provide you with a 5% or greater annual return. This income would be paid to you and/or a loved one for life, after which the assets would be distributed to us. With this arrangement, you increase your income and make a meaningful (and tax-deductible) contribution at the same time.
For example, If you purchased stock many years ago for $10,000 and that stock is now worth $100,000, but you only receive $2,000 a year in dividends (2% yield). By transferring the stock to us as a charitable trust and specifying that you want a 6% return for life, you can triple your annual income from $2,000 to $6,000, avoid the capital gains taxes you would have to pay when you sell the stock, and be entitled to a charitable contribution deduction of approximately $54,000. The amount of the deduction depends on the age of the donor, the rate of return specified in the trust, the size of the gift, and other factors.
Charitable Lead Trusts
Charitable lead trusts are essentially the reverse of the life income gifts. The income from the trust is paid to us. Under this arrangement, you transfer assets to a trustee who makes payments to us for a specified number of years, after which time the assets are transferred to your heirs. The charitable lead trust allows you to pass assets on to your children and grandchildren either completely free or substantially free of all estate and gift taxes! It can make good sense for anyone in the top estate and gift tax brackets.