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Outright Gifts
Cash Cash is the most popular type of gift to Wellspring House and is as simple to give as writing a check, or making an online donation. In addition, because of the charitable income tax deduction, the net cost of a gift of cash is significantly less than its face value. For example: B, who is in the 31% tax bracket, gives a $1,000 cash gift to Wellspring House. Because of the charitable deduction, the net cost of the gift to B (after taking into consideration her $310 tax savings) is $690. Gifts of cash are tax deductible up to 50% of your gross adjusted income in the year that you make the gift, and any amount of the gift that exceeds the 50% ceiling can be carried forward as a deduction for up to give years. Appreciated Securities A very popular alternative to a gift of cash is a gift of appreciated stocks or other securities. These gifts not only qualify for the income tax deduction outlined previously, but also allow the donor to avoid paying long-term capital gains taxes on any appreciation that investment may have earned if held for more than 12 months. For example: D, who is in the 26% income tax bracket, owns securities currently valued at $5,000 which he purchased several years ago for $1,000. If he contributes the stock to Wellspring House, he receives an $1,800 charitable deduction on his income taxes (36% of $5,000). In addition, D avoids the capital gains tax on the $4,000 profit his investment earned, for a further tax savings of $800 (20% of $4,000). Thus, the net cost of this gift to D is $2,400 ($5,000 less $1,800 less $800). The full fair market value of securities held for more than 12 months is deductible up to 30% of your adjusted gross income, and any amount exceeding the 30% ceiling can be carried forward for up to five years. NOTE: If the security or other property you are considering donating has declined in value, you would be better off selling it first, taking the deductible loss on your taxes, and contributing the cash generated from the sale to Wellspring. Finally, gifts of mutual fund shares offer the same advantages as gifts of stock. Their net asset value is deductible up to 30% of your adjusted gross income, with a five0year carry-forward, and any tax that would have been due on the capital gain earned is avoided if the shares have been held for more than 12 months. Gifts of Insurance You may own life insurance policies for needs that no longer exist – for example, your children may be grown and self-sufficient or your retirement well provided for by other investments. You can make a significant gift to Wellspring by naming us the owner and beneficiary of a new or existing insurance policy. Every premium you would pay on the policy from then on qualifies as a charitable deduction on your federal taxes. If the policy is paid up or has a cash value, you are also entitled to a further tax deduction. Insurance can also be used to replace a gift that you give to Wellspring. In this case you can purchase a policy worth the same amount as the gift you are donating, leaving the value of your estate essentially untouched, while making a significant gift to Wellspring. Gifts of Real Estate A gift of real estate is an excellent way to make a significant gift to Wellspring House and save taxes without changing your lifestyle. As the donor, you receive an income tax deduction for a portion of the value of your property while avoiding capital gains taxes on any appreciation your house may have earned. In addition, this arrangement removes the property from your estate for estate tax purposes. Living expenses and routine maintenance remain the responsibility of the donors during their use of the property. Planned Giving
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