Lower income taxes by making a gift of cash, which is fully deductible to a maximum of 50 percent of adjusted gross income (AGI). Any excess can generally be carried forward and deducted over as many as five subsequent years.
Gifts of appreciated securities provide immediate benefit to the college and, in many cases, tax deductions for the donor. Capital gains taxes can be avoided, and often the full-market value of appreciated securities can be deducted if they have been held for longer than six months.
Save in two ways! A contribution of securities with long-term capital gains (property held for more than one year) earns a charitable deduction equal to the property's full fair market value -- subject to a limit of 30 percent of adjusted gross income. Consult a tax advisor. An outright gift of securities also avoids capital gains tax on the property's appreciation.
Designated to benefit the Mercer County Community College Foundation, gifts of securities may be transferred several ways depending upon how they are held (e.g., street name, physical certificates, etc.).
If making an electronic transfer, it is imperative to contact us so the gift can be properly acknowledged and applied to the designated program. Electronic transfers to the MCCC Foundation's account give no indication where, or from whom, the stock came from. Also please note that an electronic transfer is not immediate, potentially not coming through until days after a transfer order is placed.
The value of a gift of securities will be credited, by law, at the mean between the high and low of the securities on the day the shares appear in the MCCC Foundation's account. If time is of the essence, alert the college staff when contacting for instructions.
Mutual fund shares are subject to additional regulatory requirements and transfers may take longer to complete (up to 10 weeks). Allow plenty of time to make this gift.
Gifts of stock in a closely held corporation usually allow donors the same benefits as the contribution of other securities. However, Internal Revenue Service and Securities and Exchange Commission rules must be strictly observed, and the donor must obtain an appraisal. Such gifts may take time to transact. Contact the MCCC Development, Grants & Alumni Office when considering such a gift.
Name the MCCC Foundation as the primary beneficiary or contingent beneficiary of your individual retirement account (IRA). IRAs are designed to benefit you during your lifetime, not as a means to pass on wealth to heirs. Consequently, IRAs are heavily taxed as they move to heirs. Since the goal is to use most if not all of your IRA to support your lifestyle in retirement, consider designating the charity of your choice as the recipient of the small remainder of the IRA at the time of your death. Consult a tax or financial planning advisor for more information.
Gifts of real estate or real property to the MCCC Foundation can also be tax wise, and are considered on a case-by-case basis.
A residence, vacation home, farm, acreage or vacant lot may have so appreciated in value through the years that its sale would incur a sizable capital gains tax. By making a gift of this property instead, capital gains tax can be avoided. In addition, the donor can receive a charitable deduction for the full market value of the property.
Tangible personal property -- art, antiques, rare books, coins, stamps, jewelry, etc. -- offers another way of giving. Contributed property generally will be sold to benefit the program that you designate or, if unrestricted, will fund the areas of greatest need.
It is also possible to make a gift of your home, farm or vacation home so that the donor and spouse can continue to use it for a lifetime while receiving a current income tax deduction.
Example: Mr. and Mrs. Gifter own a vacation home they'd like to continue using. The fair market value of the property is $100,000. By contributing the property at this time, but retaining the exclusive right to use it for the rest of their lifetimes, the Gifters are able to achieve a current income tax deduction of approximately $25,000. (The amount will depend upon their ages, the useful life of the house, and other factors.)
A gift of life insurance can provide a significant charitable deduction. Consider purchasing a new policy or donating an existing one that you own but no longer need. To receive a deduction, designate the MCCC Foundation as both owner and beneficiary of a life insurance policy to benefit the college. Check with your insurance agent for details.
Example: Mr. Gifter owns a $100,000 life insurance policy with a current cash value of $34,582. By transferring the policy to the MCCC Foundation as the new owner and beneficiary, Mr. Gifter qualifies to receive a current charitable deduction in the amount of $34,582. If Mr. Gifter decides to continue paying the premiums on the policy after the gift is made, these additional premium payments will be tax deductible each year.
Stock that is paying low dividends, perhaps 2 or 3 percent, may be considered as a life income gift. Transfer the stock to the MCCC Foundation and establish a charitable remainder unitrust or a charitable remainder annuity trust that would provide the donor with a 5 percent or greater annual return.
This income would be paid to the donor and/or a loved one for life, after which the assets would be distributed outright to the MCCC Foundation. Through such an agreement, the donor is simultaneously increasing income as well as making a meaningful (and tax deductible) contribution.
Example: Mrs. Gifter, age 70, purchased some stock many years ago for $10,000 and now that stock is worth $100,000. She receives only $2,000 per year in dividends, or a 2 percent yield. By transferring the stock to a charitable remainder trust and specifying that she wanted a 6 percent return for life, she could:
Charitable lead trusts are essentially the reverse of the life income gifts described above. The income from the trust is first paid to the MCCC Foundation; the charity's interest leads the way (hence the name of the trust).
Under this arrangement, assets are transferred to a trustee who makes payments to the MCCC Foundation for a specified number of years, after which the assets are transferred to the donor's heirs. The charitable lead trust allows the donor to pass assets to children and grandchildren completely free or substantially free of all estate and gift taxes. Charitable lead trusts can be a strong consideration for anyone in the 50 percent estate and gift tax bracket.
Assets that generate an income or that are likely to appreciate substantially can be put to good use as the principal of a charitable lead trust. A lead trust transfers the income from these assets to the MCCC Foundation for a designated period of time (typically 10-20 years or more). At the end of that time, the assets are returned to the donor, his or her heirs, or any other persons designated. In this manner, donors can direct a sizeable amount of annual income to the MCCC Foundation while guaranteeing that heirs will ultimately benefit from the asset.
Under a charitable remainder trust, the donor receives certain tax benefits and a return on the trust assets. After the donor's lifetime, the remainder of the trust comes to the MCCC Foundation for purposes that the donor has designated.
The Mercer County Community College Foundation can be named as a beneficiary in your will in a number of simple ways. An outright gift, either a designated dollar amount or percentage of your estate, could be specified. The MCCC Foundation could also be named as a remainder beneficiary to receive funds only after specific sums have been paid to individual beneficiaries. It may be helpful to know that the donor can easily add the MCCC Foundation to a will through an amendment called a codicil; thus, the entire will needn't be redrafted.
Bequests through a will may be for a specific dollar amount, a percentage of the total estate, or the residuum remaining after all debts, taxes, expenses and other bequests have been paid. Specific bequests of property may also be made for art objects, rare books, equipment or real estate. Bequests may be designated to support a particular purpose; but the functions and needs of the college do change over time, so an unrestricted bequest is especially appreciated. It will be applied where the need is greatest in that uncertain year when it becomes effective.
Bequests of $2500 or more without restrictions are used to create an endowment fund within the MCCC Foundation, with earnings supporting the most immediate needs of the Foundation and the college. Bequests of lesser amount are applied to an existing unrestricted endowment fund.