November 2004
Did you know that an IRA left in your estate gets double taxed? First, the IRA gets hit with the Estate Tax. Then, your beneficiaries must pay their regular Income Tax on the remaining proceeds.

Illustration:
An IRA of $500,000 is part of a $3,000,000 estate that is left to a beneficiary in the 33% tax bracket. How much do you think the beneficiary will receive?

$500,000 IRA  
IRA Balance $500,000
Less Estate Tax (47% tax) ($240,000)
Less Income Tax (33% tax) ($85,800)
IRA Balance after Double-Tax $174,200

As you can see from the illustration, while the alumnus planned to leave $500,000 to his beneficiary, he/she will only receive $174,200 due to the double-tax. A great way to avoid this double-taxation is to leave the proceeds of your IRA to the Sigma Nu Educational Foundation. By doing so, your estate will receive a Charitable Tax Deduction for the amount of the IRA. Another way to view this illustration is that your IRA left to the Foundation provides almost 3 times the benefit to Sigma Nu than it would to a taxable beneficiary.
Who do you want to share your Capital Gains with, Sigma Nu or the IRS?

As the market recovery continues, many of us will experience capital gains on our investments. Gifts of appreciated stock generally offer a two-fold tax savings. A great way to both reduce your tax burden and lend a "helping hand" to Sigma Nu is to contribute appreciated stock to the Educational Foundation. First, you avoid the capital gains tax on the increase in the value of the stock. Second, you receive a charitable income tax deduction for the full market value of the stock at the time of the gift.

Example: You have stock valued at $10,000 that was purchased a few years ago for $2,000. An outright gift of stock would result in a charitable income tax deduction of $10,000 and no capital gains on the $8,000 of appreciation.

Securities in your brokerage or custodial account may be easily transferred electronically to the Foundation. For transfer instructions, please contact us at 1-888-236-5323.