Make Your Best Gift
Learn tax-wise ways to make your best gift to the NEXT Capital Campaign. Feel free to contact your personal financial advisor to learn which method is best for your situation. You may also contact Jamie Bisek or call 952.758.3513 to find local resources within the Holy Trinity community.
Retirement Plan
Are you 70½ or older? You may be able to make gifts using your qualified retirement plan.
SCENARIO
Ron and Jean are both 73 years old and want to make a significant gift to Holy Trinity. They’ve accumulated more than $1 million in their IRA, and they must take their required minimum distributions. They don’t need their required minimum distribution to support their lifestyle.
Ron and Jean are both 73 years old and want to make a significant gift to Holy Trinity. They’ve accumulated more than $1 million in their IRA, and they must take their required minimum distributions. They don’t need their required minimum distribution to support their lifestyle.
OUTCOME
Ron and Jean request a $100,000 qualified charitable distribution (QCD) from their IRA and direct it to Holy Trinity’s campaign. They avoid the payment of income tax on this portion of their withdrawal. They also name Holy Trinity Lutheran Church as the death beneficiary of the remaining retirement funds, leaving other assets with lesser tax consequences to heirs.
Ron and Jean request a $100,000 qualified charitable distribution (QCD) from their IRA and direct it to Holy Trinity’s campaign. They avoid the payment of income tax on this portion of their withdrawal. They also name Holy Trinity Lutheran Church as the death beneficiary of the remaining retirement funds, leaving other assets with lesser tax consequences to heirs.
Though the laws on Required Minimum Distribution age have changed recently, the new laws continue to allow anyone age 70½ or older to give a QCD.
Cash
SCENARIO 1
Shelly is a single mom with a limited income. Her gratitude for Holy Trinity runs deep. She knows she can continue her current giving of $30 a month for the daily ministry of the church. But she would also take great joy in making a special gift of $1,000 to the building campaign. It’s the largest gift she’s ever dreamed of making, but she could never imagine coming up with that kind of money in a lump sum.
Shelly is a single mom with a limited income. Her gratitude for Holy Trinity runs deep. She knows she can continue her current giving of $30 a month for the daily ministry of the church. But she would also take great joy in making a special gift of $1,000 to the building campaign. It’s the largest gift she’s ever dreamed of making, but she could never imagine coming up with that kind of money in a lump sum.
OUTCOME
Shelly is already a $30-a-month automated giver. She discovers that by increasing her monthly automated gift by $27 a month – an additional 90 cents a day – over three years, she could make her gift of $1,000 to the capital campaign.
SCENARIO 2
Leo and Ashley are in their 40s with two school-age children, and they want to make their best gift from their regular income to Holy Trinity’s campaign. Before taking a closer look, they’re imagining a one-time gift of $7,500.
Leo and Ashley are in their 40s with two school-age children, and they want to make their best gift from their regular income to Holy Trinity’s campaign. Before taking a closer look, they’re imagining a one-time gift of $7,500.
OUTCOME
Leo and Ashley consult with their accountant and learn a larger gift makes them eligible to itemize their deductions this year. They decide instead to give a $10,000 gift and take the charitable income tax deduction. At their income tax rate, the net cost of the gift to them will be only $7,200.
Stock
Do you have appreciated stock? You can make a larger gift at a lower cost to you.
SCENARIO
Bob and Mary are in their late 50s with young-adult children who they’ve already put through college. They both want to make their best possible gift to the capital campaign.
Bob and Mary are in their late 50s with young-adult children who they’ve already put through college. They both want to make their best possible gift to the capital campaign.
OUTCOME
Bob and Mary decide to gift $20,000 of appreciated stock to Holy Trinity’s campaign. Since the stock was inherited at a cost basis of $8,000, they will avoid paying $1,800 in taxes on the $12,000 of capital gain. They also qualify for a charitable tax deduction and have an income tax savings of $5,600. After both tax benefits, the net cost of the gift to Bob and Mary is only $12,600. Bob and Mary also decide to make this gift three years in a row – a total $60,000 commitment to the NEXT Campaign with gifts that will actually cost them only $37,800.
Bob and Mary decide to gift $20,000 of appreciated stock to Holy Trinity’s campaign. Since the stock was inherited at a cost basis of $8,000, they will avoid paying $1,800 in taxes on the $12,000 of capital gain. They also qualify for a charitable tax deduction and have an income tax savings of $5,600. After both tax benefits, the net cost of the gift to Bob and Mary is only $12,600. Bob and Mary also decide to make this gift three years in a row – a total $60,000 commitment to the NEXT Campaign with gifts that will actually cost them only $37,800.
Savings
Do you have CDs or other savings that produce very little income? Depending on your age, you could increase your income with a gift.
SCENARIO
Sam is 76 years old. Sam wants to make a significant gift to Holy Trinity’s campaign, but would like to avoid reducing their current income. They have a $50,000 CD maturing, and though they’ve never needed the principal, they like the idea of receiving a guaranteed income. If renewed at a 3% rate, they’ll receive $1,500 each year.
Sam is 76 years old. Sam wants to make a significant gift to Holy Trinity’s campaign, but would like to avoid reducing their current income. They have a $50,000 CD maturing, and though they’ve never needed the principal, they like the idea of receiving a guaranteed income. If renewed at a 3% rate, they’ll receive $1,500 each year.
OUTCOME
Sam uses $25,000 from the CD to establish a charitable gift annuity that, at their age, provides a guaranteed, fixed payment for Sam’s life of 6% or $1,500 per year – the same return for the CD. They can take a charitable income tax deduction for their gift, and receive a portion of the annuity’s income tax-free. After Sam’s death, Holy Trinity receives the charitable gift annuity’s remainder value.
Sam uses the other $25,000 from the CD to make an upfront gift to Holy Trinity’s NEXT Campaign. Sam is eligible for a charitable deduction, effectively reducing the gift’s costs.
