Giving to Albion FUMC
Additional Information #1
Gifts Made Now from Current Assets
Gifts of Cash
A Cash Gift is the simplest and most common way to support the Church. Cash gifts are deductible for all taxpayers who itemize deductions. The charitable deduction comes off the top of your income — the part in the highest tax bracket.
You are entitled to a deduction for the entire amount of the gift, as long as all your deductible gifts in the year do not exceed 50% of your adjusted gross income. If you cannot use the entire deduction in one year, you may carry it forward for up to five more years.
You are also eligible for a State of Michigan tax credit equal to a portion of your gift.
Gifts of Securities
You do not need cash to make a gift to the Church. Contributing securities that have appreciated in value is often more advantageous.
By donating appreciated securities to the Church, you can unlock the profits of your investment, and you will receive two tax advantages:
- You may reduce or totally avoid capital gains tax on the appreciation
- You receive a charitable deduction for the current market value (full value) of the security, regardless of how much the value has grown from your original purchase price.
Generally, gifts of appreciated securities are deductible up to 30% of your adjusted gross income in the year of the gift. Gifts in excess of that amount may be carried forward up to five more years.
Remember, for maximum tax benefit, give the appreciated securities to the Church, rather than selling them yourself. The Church will decide if they are to be liquidated or held as a long-term investment.
Here is an example of the tax advantages of a gift of appreciated securities for person whose income is in the 28% tax bracket:
| Value of stock today | $100,000 |
| Original cost of stock | 25,000 |
| Capital gains tax savings if you give the security rather than sell it (20% x $75,000) | 15,000 |
| Income tax deductions for a charitable gift (28% x $100,000) | 28,000 |
| Total tax savings from gift | $43,000 |
However, if you want to give securities that have decreased in value, you would benefit most by selling them and then contributing the cash. By selling the securities instead of transferring them to the Church, you may be permitted to deduct the capital loss on your income taxes as well as the charitable deduction from the gift.
Gifts of Closely Held Stock
A business owner who contributes closely held stock to the Church will be allowed a charitable contribution for the fair market value of the stock. An additional benefit is that the donor may escape taxation on any appreciation in the value of the stock.
It is particularly important to consult your financial or legal advisors as to stock valuation and other ramifications before making a gift of closely held stock.
Gifts of Real Estate
Some donors leave their homes or other real estate to the Church through their wills, establishing a 100% charitable tax deduction for estate tax purposes. Others are able to consider transferring shuck property to the Church during their lifetimes. All types of real estate are possible gifts to the Church, but the Church must agree to accept them. Before accepting the gift of real estate the Church will consider the following issues related to the property:
- environmental concerns,
- existing mortgages or liens
- marketability, or lack thereof
Any adverse findings related to these issues may cause a rejection of the gift.
The donor will incur appraisal and legal expenses for gifts made during life, but the tax savings will normally far outweigh those expenses. Please contact a member of the Capital Campaign or Finance Committees to discuss such a gift.
Gifts of Personal Property
Most tangible personal property, including art, books, coins, antiques, and other valuable objects, can qualify as a charitable gift.
Generally, if your property can directly benefit the Church and its missions, the full market value of the property is deductible. Gifts of property that must be sold, or property unrelated to the Church’s missions, qualify for a partial deduction.
Such gifts to the Church also unlock the increased value of appreciated property by allowing you to avoid tax on the gain in value.
The IRS has strict guidelines on appraisals in these situation, and tax advisors should be consulted.