Gifts That Could Reduce Taxes


Gifts That Could Reduce Your Taxes

Retirement Plan Savings

Since Ocean Conservancy is tax-exempt, making Ocean Conservancy a beneficiary of your retirement plan means that 100% of your gift passes to the organization, which may possibly reduce income and estate taxes that might otherwise be due.

A gift of retirement plan assets to Ocean Conservancy means that 100% of your gift passes to us with no deduction for taxes that would be levied if the assets are passed to a non-spousal heir.
Beneficiaries Your Heirs Ocean Conservancy
Gift Amount $100,000 $100,000
Income Tax* ($39,600) -0-
Net to Beneficiary $60,400 $100,000
*Based on 2014 maximum income tax rate of 39.6%.

An Annuity That Reduces Your Capital Gains Taxes

If you have stocks or mutual funds that you have held a year or longer you can use them to fund a charitable gift annuity. By doing so, you will avoid a significant portion of the capital gains tax that would otherwise be owed. The remaining gain will be equally allocated over several years of your annuity payments and will not be taxed all at once.

Betty, age 75, establishes a gift annuity using stock that cost her $4,000, and is now valued at $10,000. She will receive annual payments of $600 for life and get an immediate charitable gift deduction of $4,684. The capital gain of $6,000 is reduced to $3,189.

Charitable Remainder Trust

This variable income trust pays out a percentage of assets, valued annually. For your donation, you receive an immediate income tax deduction for a portion of your contribution to the unitrust and savings on capital gains taxes if you use appreciated property.

Virginia and Howard have been members of Ocean Conservancy for years. They care deeply about Ocean Conservancy and its future, and have decided to transfer an asset, which they originally purchased years ago for $200,000 and is now worth $400,000, into a 5 percent Unitrust. They are both 67. The results:

  • They avoid $60,000* in capital gains taxes.
  • The first year, they receive $20,000 income from the trust. (Future income will rise or fall with the trust asset value.)
  • They receive a charitable income tax deduction for remainder value.
  • They support Ocean Conservancy and ensure a healthy ocean for generations to come!

* assumes combined state and federal capital gains rates of 20 percent