Ways To Give

Individuals age 70.5 and older can move up to $105,000 per year from their Individual Retirement Accounts (IRAs) directly to their favorite charity or charities without it affecting their taxable income.

People who are charitably inclined, don’t want or need the income, and don’t want or need their Required Minimum Distribution (required for those age 73 and older).

This is a potential income tax (and an estate tax) reduction strategy while being charitable.

First, individuals should contact their IRA plan administrator to start the distribution process. When they’re ready to send the QCD, they can have the check made payable to “FCF” and mail to:

First County Foundation
45 Kennebunk Rd.
Alfred, ME 04002

Next, the person should call FCF at 207.459.7055 or email Rachel Stansfield at restansfield@yorkcountyfcf.org of the intended gift along with the following information: Name, gift amount, anticipated date of check arrival, and name of IRA custodian.

Workplace retirement plans (401K is for-profit, 403B is non-profit, and 457 is government) where FCF can be named as a beneficiary, paid on the death of the individual.

For those who are charitably inclined but want to keep their bequest intentions revocable for now.

This gift would NOT be included as part of one’s estate and would not be taxed as income.

An individual should bring any beneficiary change forms from the relevant retirement plan custodians. FCF can offer suggested language for this person to complete and file.

Real estate property (e.g. residential real estate, commercial real estate, and/or raw land) is donated in its entirety. The property is then promptly sold, and the net proceeds are applied per the donor’s wishes.

This option is best for individuals or couples looking for the highest income tax deduction possible by making a real estate donation now. Of course, it is also removed from one’s estate for estate tax planning purposes.

There is a potential charitable income tax deduction on the full dollar amount of the qualified independent appraisal/fair market value. And, it is removed from the individual’s estate.

A qualified independent appraisal of the real estate property (paid for by the potential donor) is a really good start. Any information on “carrying costs” (e.g. insurance, property tax, maintenance, etc.) is also helpful to know.

BARGAIN SALES allow you to sell property to a nonprofit for less than its market value, with the difference counted as a charitable donation. With RETAINED REAL ESTATE, you donate property but continue to live in or use it during your lifetime. FLIP TRUSTS (or flip charitable remainder trusts) let you donate property, which is then sold by the trust with proceeds benefiting both you and the charity.

FRACTIONAL INTEREST GIFTS involve donating a percentage ownership in the property, which can offer immediate tax benefits. Finally, CONSERVATION EASEMENTS let you permanently protect land from development by donating certain property rights, preserving it for future generations while receiving tax advantages.

Securities (also known as stocks) are purchased on the open market (such as companies like Microsoft or Home Depot) that can be easily traded on an exchange. Instead of selling the stock on the open market, it is donated.

This option is good for people who have purchased the stock over a year ago and therefore may be subject to long-term capital gains (and don’t want to incur capital gains tax if they sell it). Also, people who have “too much” of one type of stock in their investment portfolios (outside of a retirement plan), known as being “overweighted” in one asset class, and want to reduce risk by “re-balancing” and unloading that stock to charity.

The donors waive all capital gains tax liability upon the donation, thereby reducing risk in the portfolio, and are eligible for a charitable income tax deduction (for the year of donation, and then carried forward five years more, as appropriate, to maximize the deduction).

Having answers to these six questions:

• Who is the registered owner of the shares?
• What fund is the gift going into?
• When are the shares expected?
• What shares and how many are coming, and expected total dollar amount?
• What broker/trust company are they coming from?
• What is the cash/invested allocation? In other words, how much does the donor want to keep in cash within a new or established fund (e.g. a DAF)?

MUTUAL FUNDS are pooled investment vehicles that typically invest in a range of assets, including PRIVATELY HELD STOCK. By adding PRIVATELY HELD STOCK to their portfolios, MUTUAL FUNDS can access unique growth opportunities beyond public markets, though these investments are less liquid and harder to value.