PLANNED GIVING: Outright Gifts

Outright Gifts

Gifts of Cash

The most common type of gift is the gift of cash -- it is simple, straightforward, and as easy as writing a check. And, because charitable gifts qualify for federal tax deductions, the real out-of-pocket cost of a cash donation is usually much less than its face value: you save whatever tax you would have owed on the amount of the gift.

For record purposes, a gift of cash is considered made on the date it is mailed or hand delivered. Please make checks or money orders payable to the Diocese of Helena. Gifts may be designated to a specific parish by including that parish's name in the memo line of your check. You may also make a gift by credit card.

To contribute to a parish or to the diocese in one of these ways, simply call 406-442-5820.

Advantages:

• Simple and quick
• Charitable income tax deduction
• The Church can make immediate use of your gift
• Estate tax and probate savings

Gifts of Appreciated Property

Charitable gifts of appreciated property (real estate or capital gain securities) can provide even greater tax benefits than a cash gift of equal value. You may take a charitable deduction for the full fair market value of the property, while avoiding capital gains taxes. The IRS currently allows you to deduct the full fair market value of the property up to 30% of your adjusted gross income for the year of the gift. Any amount over that ceiling can be carried forward for future deduction, for up to five years, subject to the same percentage limitations.

A gift of appreciated property is considered made on the day the transfer is completed. Please contact the Development Services Office at the Diocese (phone: 406-442-5820) for specific instructions.

Advantages:

• Opportunity to make a substantial gift to the Church
• Charitable income tax deduction
• The Church can make immediate use of your gift
• Avoid capital gains tax
• Estate tax and probate savings

Gifts of Tangible Personal Property

A gift of tangible personal property--such as furniture, art works, jewelry, antiques, books, coin or stamp collections, and so on--is deductible for its full fair market value (up to 30% of your adjusted gross income) if it meets two conditions

1) it must be documented by a legitimate appraisal, and
2) it must satisfy the "related use" standard.

"Related use" means that the Church must be able to use the gift in a way that is related to or furthers its educational mission. For example, books donated to a parish school library will meet the standard, as will classroom or office furniture, or computers, or business machines. A painting will meet the standard if it is displayed for viewing, but will not if the Church sells it. Property that does not satisfy the "related use" standard may still be deducted, but only for your cost basis in the property, subject to a limit of 50% of your adjusted gross income. The five-year carryover rule for the deduction applies in both cases. Please note, however, that in order to protect its tax-exempt status, the Church must severely limit the non-related-use gifts that it accepts.

A gift of tangible personal property is considered to be made on the date when ownership or legal title is transferred. To make the formal transfer, you may write up a simple "letter of intent to donate" that identifies the property and includes a signed statement of your intent to transfer it to the Diocese of Helena.

Advantages:

• Opportunity to make a unique and substantial gift to the Church
• Charitable income tax deduction
• The Church can make immediate use of your gift
• Avoid capital gains tax
• Estate tax and probate savings

Bargain Sales

You may have property that has appreciated in value, but you only want to give part of that value to the Church. You may make a "bargain sale" of the property to the Diocese for less than its fair market value, usually your cost basis. You thereby get cash in hand to recoup your original investment, while getting a charitable deduction for the donated difference. You should note, however, that some of the cash recovered will be treated as a capital gain. For record purposes, the date of the sale is considered to be the date of the gift. Bargain sales require careful planning. Please consult your tax adviser, legal counsel, or other financial planner, and contact the Development Services Office at the diocese for further information.

Advantages:

• Possible recovery of original investment
• Opportunity to make a substantial gift to the Church
• Charitable income tax deduction
• Reduction in capital gains tax
• Increased cash flow
• Estate tax and probate savings

Gifts of Closely Held Stock

If you are a business owner and you contribute closely held stock, you may take a charitable deduction for the stock's appraised fair market value. Besides increasing your cash flow, you also avoid the potential capital gains tax on the appreciated value of the stock.

For record purposes, the date of a gift of closely held stock is considered to be the date the stock is transferred.

Advantages:

• Opportunity to make a substantial gift to the Church
• Charitable income tax deduction
• Avoid capital gains taxes
• Positive impact on cash flow
• Estate tax and probate savings
• Excellent estate planning opportunity for yourself and your heirs

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