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Inside This Issue

This Issue
Kurt Sandman – "I Wanted to Give to a 'Do' Organization"
Consider the Red Cross in Your Year-End Planning
Time To Review Your Estate Plan?
Capital Gains Taxes Return to Haunt Investors


Mission Statement

The American Red Cross, a humanitarian organization led by volunteers and guided by its Congressional Charter and the Fundamental Principles of the International Red Cross Movement, will provide relief to victims of disaster and help prevent, prepare for and respond to emergencies.


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Consider the Red Cross in Your Year-End Planning

Will

With 2009 rapidly slipping away, many taxpayers are making plans to reduce this year’s income taxes while preparing for what they hope will be a better 2010.  For friends of the Red Cross, this planning often involves making a year-end gift that will help replenish our disaster relief fund and trim 2009 taxes in the bargain.  Here are some year-end gift ideas to consider.

Gifts of Cash - If you want to make a gift today and maximize your charitable deduction, you’ll surely want to consider a cash gift. Cash is the simplest donation and provides immediate benefits. Gifts of cash include currency, personal checks, money orders, credit cards and wire transfers.

Are there benefits to using cash to fund a charitable gift? Yes. First, you are entitled to a charitable income tax deduction. Second, this deduction counts against a larger portion of your taxable income than with a gift of appreciated assets. Here’s why: The IRS allows you to claim charitable deductions for gifts of cash up to 50 percent of your adjusted gross income but only up to only 30 percent for gifts of appreciated assets.

Gifts of Securities - The rebound in the stock market has revived the popular technique of contributing stocks or mutual funds that have gone up in value.  Why are these gifts so attractive?  Because our supporters receive a double tax benefit:  They can deduct the full fair market value of their appreciated securities – not just what they paid originally – if the securities have been owned more than one year.  Donors save again by avoiding all capital gains taxes on the “paper profit” that would be owed upon a sale. 

What if you own stocks that have gone down in value since you bought them?  If you want to use these securities for charitable giving, it’s best to sell first and give the proceeds.  That way you will qualify for both a capital loss deduction and a charitable deduction.

Gifts of appreciated securities are easy to make, and we’ll be glad to help ensure that your gift qualifies for a 2009 charitable deduction. To learn how to make a gift of Appreciated Securities see our detailed Stock Transfer Instructions

More Great Ideas for Year-End Gifts to the Red Cross

  1. Consider a gift of a personal residence, such as a vacation home, while retaining lifetime use and ownership of the property.  Charitable deductions for such gifts are unusually high at this time, and the Red Cross will eventually benefit, just as if you had left the property by will.
  2. Transfer debt-free real estate, appreciated securities or even collectibles to a charitable remainder trust.  The trust will pay you or others income for life, avoid capital gains taxes and provide a significant charitable deduction on your 2009 tax return.
  3. Give an old life insurance policy that is no longer needed for family security and deduct the fair market value of the policy (or total premiums, if that amount is less).  Future premium payments are also tax-deductible.
  4. Arrange a charitable gift annuity that makes payments to an older relative, such as a parent.  It’s an effective way to assist both family members and the American Red Cross, with excellent tax results for donors and annuity recipients.

            Here are some points to keep in mind when planning your gifts:

    • Timeliness.  The date of delivery is the key to whether a gift will be deductible in 2009.  A check will be considered delivered on the date you mail it – even if postmarked as late as December 31, 2009.  The same rule applies to properly endorsed stock certificates.  Check with us if you have any questions on timing of gifts.
    • Deduction Ceilings.  Every dollar you give before the end of the year will be deductible.  But the most you can deduct for 2009 will be 50% of your adjusted gross income.  Gifts of securities or other assets can be deducted up to 30% of your AGI.  If your deductions go over these ceilings they can be carried over and deducted in future years.

Note: Mutual Fund shares can be given with the same beneficial effect as listed and actively traded stock. Thus, mutual fund shares bought by you eight or ten years ago - though they may be worth several times your original cost – can be given without incurring any capital gains tax.  Your deduction is the “net asset value” of the shares, which is calculated each day, generally after the close of the stock market.  If you decide to contribute mutual fund shares, please notify us as soon as possible.  Transfers can take from two to six weeks to accomplish and we will need to work with you and your account manager to make the gift effective for 2009.

To learn more about donating securities, contact the Gift Planning Office at 1-800-797-8022, ext. 5, plndgiving@usa.redcross.org or log on to www.redcrosslegacy.org.

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Disclaimer:

The articles in the issues of the Legacy newsletters are for general illustration purposes only. Information, Gift annuity and tax rates were current as of the time of publication. There can be no guarantee that such information will continue to be accurate in the future. Interested Donors should check with the Gift Planning Office for current rates and deduction amounts before completing their gifts. Calculations of tax deductions will vary based on applicable federal discount rates, which change on a monthly basis. The American National Red Cross is not engaged in rendering legal or tax advisory service. For advice or assistance in specific cases, the services of an attorney or other professional advisor should be obtained. Certain links in this site connect to other Web sites maintained by third parties over whom the American National Red Cross has no control. American National Red Cross makes no representations as to the accuracy or any other aspect of information contained in other Web sites.