| |
 |
 |
. . . that a cash gift can cost you more?
Discover the Joy of Giving Without Using Cash
When thinking about making a charitable gift to an organization that has touched your heart, like the Sigma Nu Educational Foundation, Inc., a gift of cash might immediately come to mind. But, professional advisors agree that cash is not always the most efficient asset to donate.
The gift of an appreciated asset, like real property or securities, can provide you with a double tax benefit. The growth in these assets is generally subject to long-term capital gain tax if the property owner sells the property-which has a maximum tax rate of 15 percent. When you donate an appreciated asset, however, you avoid all capital gains tax. Plus, you still receive a charitable income tax deduction for the full value of the property. Compare these benefits to a gift of cash in the chart below.
Compare the Benefits: Real Estate vs. Cash Gift |
| |
Give
$300,000
in Real Estate |
Give
$300,000
in Cash |
| Fair market value of gift |
$300,000 |
$300,000 |
| Cost basis |
$50,000 |
NA |
| Capital gain if otherwise sold |
$250,000 avoided |
NA |
Federal capital gains tax savings
($250,000 x 15%) |
$37,500 avoided |
NA |
| Income tax savings in a 35 percent federal tax bracket from a $300,000 charitable deduction ($300,000 x 35%) |
$105,000 |
$105,000 |
| Total tax savings |
$142,500 ($37,500 + $105,000) |
$105,000 |
Net cost of gift
($300,000 - $142,500 total tax savings) |
$157,500 |
$195,000 |
As you can see, using appreciated property rather than cash lowers the net cost of your gift.
Please contact James A. Owens at 1-888-236-5323 for more information.
|
|
 |
|
 |
|
|
