Your 2015 Opportunities With Charitable Gifts to Abingdon Theatre Company
You may be aware that with a gift of cash or property to Abingdon Theatre Company by December 31 you may obtain significant income tax savings, and benefit Abingdon. For individual and corporate donors, the following are some of the ways you can obtain 2015 income tax savings and promote Abingdon Theatre Company.
1. Gift cash by writing a check, or use your credit card even if you pay the December charges in January 2016.
2. Review your investment portfolio and gift appreciated publicly traded stock while avoiding any capital gain tax on the increase in stock value. The charitable deduction is the fair value of the stock at the date of the gift. For gifts of closely held stock you will need an appraisal.
3. Consider gifting real estate or other property such as artwork or collectibles. In most circumstances, you will avoid any capital gain tax on the appreciation in the property’s value.
4. For individuals over age 70 and ½ years of age, you can have your IRA distribute funds directly to Abingdon Theatre Company and not incur an income tax liability.
5. Individuals can consider establishing a charitable remainder trust (CRT) to benefit Abingdon Theatre, and you (the donor) or a family member can also receive an annual income stream from the trust. There are different types of CRTs, and all can be beneficial to you and Abingdon Theatre Company. For example, you can contribute an appreciated asset to the CRT, and the asset can be sold and sale proceeds invested, while avoiding the recognition of a current capital gain tax. CRTs can be useful in providing you with a measurable annual distribution to help you fund your cash flow needs.
6. Gifts of insurance on the life of an individual can be a very effective charitable strategy. Abingdon Theatre could be named as both the owner and beneficiary of the insurance policy; annual premiums that may be required to keep the policy in force are deductible as well. As an alternative, consider acquiring a life insurance policy and naming Abingdon as the beneficiary.
7. As the end of the calendar year approaches, review your estate plan and consider naming Abingdon Theatre as a beneficiary of specific assets. With a planned gift to Abingdon Theatre Company, you may be able to obtain significant income and estate tax savings, for instance, by a gift of a portion of your IRA or 401k plan balance. Review your will to make sure you are content with your selection of beneficiaries, executors, trustees, and guardians for minors.
8. Abingdon Theatre Company and your tax advisor can work together to help you understand the form of charitable gift that is most appropriate to you, tailored to your objectives and financial circumstances. All charitable gifts by individuals and corporations are subject to income tax deduction limitations measured by the amount of 2015 income. In addition, there are appraisal, valuation, and documentation rules that must be observed. With this Outline, Abingdon Theatre is not providing any tax advice and the contents of this Outline should not be relied upon as tax advice.
Make a donation to Abingdon Theatre Company today.
IRA Charitable Rollover
(Revised January 14, 2009)
As part of The Pension Protection Act, individuals who are 70½ or older may make a charitable donation by taking a tax-free withdrawal from their IRA as long as that money goes directly to the charity. Under the provision, an IRA withdrawal donated directly to ABINGDON THEATRE COMPANY is excluded from your income for tax purposes and the withdrawal counts against your required minimum distribution for the year.
What is an IRA charitable rollover?
The law uses the term “qualified charitable distribution” to describe an IRA charitable rollover. A qualified charitable distribution is money that individuals who are 70½ or older may direct from their traditional IRA to eligible charitable organizations. The provision has a cap of $100,000 for charitable distributions from individual IRAs each year. Individuals may exclude the amount distributed directly to an eligible charity from their gross income.
What is the new expiration date of this provision?
This provision is still time-limited. It applies only to qualified distributions made before January 1, 2010.
Does a donor also receive a charitable deduction when they roll over assets to a charity under this provision?
No. Under this provision, donors benefit by not having to recognize the amount contributed directly from their IRA to a qualifying charity. However, because donors exclude this contribution from their gross income, they cannot take a charitable contribution deduction for the contribution; to do so would result in a double benefit for donors and that is explicitly prohibited.
To which charities may donors make qualified charitable distributions?
Most contributions to public charities—other than supporting organizations—are considered qualified charitable contributions. However, distributions from IRA accounts to donor advised funds held by public charities are not considered qualified charitable distributions under this charitable rollover provision. (See What is a donor advised fund? on the Council’s website.)
Individuals can make qualified charitable distributions to a private operating foundation or to a private foundation that elects to meet the conduit rules in the year of the distribution (see Definitions, below). Neither private non-operating foundations nor split interest trusts are eligible for special treatment as qualified charitable distributions under the law.
Will an IRA distribution to a fund held by a community foundation qualify for this special treatment?
Yes, distributions to almost all types of funds typically held by community foundations—such as scholarship, field-of-interest, and designated funds—qualify.
Make a donation to Abingdon Theatre Company today