ASSETS TO CONSIDER FOR MAKING OUTRIGHT GIFTS

CASH:

 Tax Benefits:                                                                                                        

 If you itemize your deductions on your personal federal income tax return, you can make a charitable gift deduction for the amount of your cash gift up to 50% of your adjusted gross income. If you can’t take the full deduction the first year because of tax limitations, the IRS allows you to carry the balance forward over the next five years

 Cash Giving Options:

• By check or money order.
• Automatic Electronic Transfer – you can direct BES to deduct a certain amount from your checking or savings account each month, eliminating the need for envelopes and stamps. To learn more and sign up for electronic funds transfer, download a PDF version of our Pre-Authorized Automatic Pledge Payment Enrollment Form.
• By credit card – use our secure online form.

SECURITIES: 

Publicly Traded Stock, Bonds, Mutual Funds

Stock:

• You transfer your stock/bonds to BES by electronic wire or physical transfer.
• BES sells your stock/bonds and uses the proceeds to support its programs.
• You receive a gift credit and an immediate income tax deduction for the fair market value of the stock/bonds on the day of transfer, no matter what you originally paid for it.
• You pay no capital gains tax on the stock/bonds you give to BES.
• If you own stock/bonds that have decreased in value since you purchased it, you can sell the stock/bonds and claim it as a loss for income tax purposes. By giving the cash proceeds to BES, you receive an income tax deduction.
• If the stock/bonds you donate is held by your broker, the gift date is the day the stock/bonds reaches our account. If you hold the certificates yourself and mail them to us, the gift date is the postmark date on the envelope.

Mutual Funds:

• For tax purposes, a mutual fund is not considered a gift until it has been transferred out of your name and into the name of BES. This is important, as the actual date of the transfer into BES’ account determines the completion, value and deduction of the gift for tax reporting purposes.
• The transfer of mutual fund assets is usually done electronically, and most mutual fund companies have their own guidelines for transferring their funds. Upon receiving your instructions, your mutual fund agent will transfer the shares to BES.

How to Transfer Stock & Mutual Funds by Electronic Wire or Physical Transfer:

Electronic Transfer: Ask your broker to wire transfer your securities gift to the Burlington Emergency Shelter's account at Wells Fargo Advisors account using the following instructions:

Physical Transfer: If you are in possession of the stock certificates, you will need to sign a “stock power” for each stock certificate you transfer to BES. If the stock certificate is registered in two names, both individuals need to sign the stock power and each stock power must signature guaranteed at a bank or investment brokerage firm.

Each stock power must be signed exactly as the name appears on the face of the certificate and mailed to: Planned Giving, The Burlington Emergency Shelter, P O Box 1481, Burlington, VT 05402-1481.

Please be sure to mail the stock power and stock certificate in separate envelopes for security purposes.

IMPORTANT: Whether you are electronically transferring securities, mailing a stock or bond certificate or giving a mutual fund gift, please let us know. This will allow us to track the progress of the transfer to us, disburse your gift correctly and provide you with an acknowledgment letter for your tax records.

LIFE INSURANCE:

 Existing Life Insurance Policy:

• Life insurance can be an affordable way to meet your charitable giving objectives and make a significant gift to BES in the event of your death.
• The most common way of making a gift of life insurance to BES is to name us a beneficiary of an existing life insurance policy while you retain ownership. While this gift will not result in any income tax deductions, your estate will receive an estate tax charitable deduction for the amount of the policy proceeds given to BES.

Paid Up Life Insurance Policies:

• You make a gift by naming BES the irrevocable owner and beneficiary of a paid-up insurance policy on your life.
• You will receive an immediate charitable deduction equal to the replacement cost of the policy, or the cost basis of the policy at the time of transfer, whichever is less.
• We reserve the right to keep the donated policy in force during your lifetime, or to terminate it for its cash surrender value.

New Life Insurance Policies:

• You may make a gift to BES by taking out a new policy on your life, naming BES the irrevocable owner and beneficiary.
• We will receive the premium notices from the insurance company, and you will make annual donations to BES to offset the premium payments we will need to make. These gifts of premium payments are tax deductible.
• However, there is no deduction for taking out a new policy.

Existing Non-Paid Up Life Insurance Policies:

• You make a gift to BES by naming us the irrevocable owner and beneficiary of an existing non-paid up life insurance policy.
• As with a new policy, BES will receive the premium notices from the insurance company, and you will make annual donations to us to offset the premium amounts we will need to make. The premium gift payments are tax deductible.
• There will also be an income tax deduction at the time of the gift of the policy to BES approximately equal to the policy’s cash surrender value.

 Beneficiary of a Life Insurance Trust:

• You set up an irrevocable life insurance trust with a sizeable  life insurance policy owned by the trust.

• You make a gift to BES by naming us as a beneficiary of the life insurance trust.
• Although your primary objective may be to make sure your spouse and minor children are taken care of in the event of your death, you may also wish to make a significant gift to BES.
• You provide that the life insurance trust pays out income to your spouse for life or for the benefit of minor children until they reach a designated age, with the remainder interest passing to BES as beneficiary.

 PERSONAL PROPERTY:

• You transfer paintings, art works, antiques, collectibles or other valuable personal property to BES.
• However, in order to qualify for an income tax charitable deduction and to avoid capital gains tax on the transfer to BES, you cannot require us to sell the personal property upon receipt from you. Otherwise, the IRS will limit your deduction to your cost basis in the personal property items rather than their full fair market value. The personal property must in some way help us to advance our mission as a homeless shelter.
• BES may decide to hold the personal property and display or use it in furtherance of its mission.
• BES may elect to sell the personal property as some point in the future and use the proceeds for its programs.
• You will need to secure an independent appraisal of the personal property to determine the amount of your charitable deduction.
• Please check with us prior to making any gifts of personal property.

 REAL ESTATE:       

                                                                                                                             Residential, Commercial, Vacation Home, Undeveloped Land,                      

• Gifts of real estate can save you thousands of dollars in income, estate and capital gains taxes, while providing a substantial benefit to BES.

• When you make an outright gift of unencumbered real estate to BES, you can deduct the fair market value of the property as a charitable contribution for the year in which you make the gift.
• You may deduct up to an amount equivalent to 30% of your adjusted gross income and any amount over that may be carried forward over the next five years. You also will avoid any capital gains tax that may apply to property held long term.
• You will need to secure an independent appraisal to establish the property’s value.
• We must review and approve the gift of real estate before transfer.
• Among other issues, we must consider the property’s marketability and environmental status.

Retained Life Estate:

• If you prefer to continue living in or using the property during your lifetime, but wish to eventually give your property to BES, you may want to consider a life estate arrangement. Under this set up, you deed the property to BES now but still retain the right of life occupancy for yourself, your spouse or other beneficiary.    
• You will receive an immediate charitable income tax deduction with the same 30% limitation and five year carry over provision. However, the amount of deduction is based on the value of BES’ future interest in the property.   
• In most cases, you continue to be responsible for maintenance and property taxes on the property.
• As with any gift, removing real property from your estate can also lower your estate taxes and probate costs. When the Retained Life Estate agreement ends, BES is free to use the property or the proceeds from the sale.   

Please contact us to offer comments and join our mailing list.
Last Updated  in February, 2010
Copyright 2005, The Burlington Emergency Shelter