Here are Ten Easy Ways to Minimize Your Taxes and Maximize Your Gifts to the Auburn Valley Humane Society
Gifts of Cash
Cash contributions to the Auburn Valley Humane Society are deductible as an itemized deduction in the year you make the donation, up to a total of 50 percent of your adjusted gross income. Excess charitable deduction can be carried forward for up to five additional years.
Gifts of Securities
If you donate stocks or mutual funds to the Auburn Valley Humane Society that have risen in value and you’ve held for more than one year, you pay no capital gains tax on the transaction and are entitled to a charitable contribution for the full fair market value of the stock. If you wish to keep a certain stock in your portfolio, you could donate the stock and then use cash to buy the same stock, thus increasing your cost basis to current fair market value. If you have stock losses, generally you should not contribute the stock, but rather sell the stock yourself to realize the loss for tax purposes. You can then contribute the cash and take a chartable deduction.
Gifts of Real Estate
If you own property that is not subject to a mortgage and has appreciated in value, a charitable gift of real estate to the Auburn Valley Humane Society may be an attractive option. You can claim an income tax deduction based upon the fair market value of the property, avoid all capital gains taxes and remove that asset from your taxable estate.
Retirement Plan Assets
Your most efficient estate planning option may be leaving all or a portion of your retirement plan to the Auburn Valley Humane Society. Tax laws often subject these assets to the highest combined income and estate tax upon death. Many techniques can be used to avoid combined tax rates of nearly 65 percent. At the same time, you can pass more tax-favored assets to your family. You can also make tax-free gifts from your IRA. You can direct your mandatory withdrawal amount (or any amount up to $100,000 a year) to be used to make charitable gifts on a totally tax–free basis. A donation of your IRA could also result in maximizing your social security benefits.
Charitable Gift Annuity
Through a simple agreement between you and the Auburn Valley Humane Society, we acquire an annuity contract on your behalf with funds or property you donate to us. That contract provides you as the annuitant with a fixed dollar distribution each month or quarter for the rest of your life. Generally, the older you are at the time of the gift, the higher the annuity payout. You can also fund the gift with appreciated property that, in addition to a charitable deduction for the gift, may spread those capital gains out over your lifetime.
Life Income Gifts
Life income gifts allow you to receive an income as a result of making a chartable gift. Depending on the plan you choose, the income can be fixed or variable and can be for you or other beneficiaries you choose. For example, you might create a Charitable Remainder Trust to pay income to you for life or a period of time not to exceed 20 years and contribute money, stock, or other property to it. Once placed in the trust, the assets can be sold (without capital gains tax) and the proceeds reinvested to produce a higher yield. Life income gifts entitle you to an immediate income tax deduction, which is based upon the present value of your gift to us. At the end of the trust’s term, the balance in the trust supports our mission.
By putting the Auburn Valley Humane Society in your will or trust and leaving a percentage of your estate, or making a specific bequest of money or a particular piece of property to our organization, you would be creating a lifetime legacy for homeless and abandoned animals in our care.
Retained Life Estates
Retained life estates allow you to transfer the deed of your personal residence to the Auburn Valley Humane Society now and keep the right to live in and use the property for your lifetime. You will receive a current charitable deduction in the amount that is based on your life expectancy and the value of the property.
You can contribute a life insurance policy to our organization by naming the Auburn Valley Humane Society either as the owner and beneficiary or simply the beneficiary. If you name our organization as both, you will be entitled to an income tax deduction limited to the lower of the value of the policy or your cost basis in the contract.
Bank Accounts & CD’s
You can name the Auburn Valley Humane Society as the “payable-on-death beneficiary” of your bank accounts or certificates of deposit. You own the assets for your lifetime and have them available for your use. Upon your death, the assets pass directly to our organization without going through probate