How to Be Tax-Smart at Year-End
Making a charitable gift to Minnesota Medical Foundation on or before Dec. 31 can provide you with a tax break for the year when you itemize deductions on your tax return. Here are several strategies for resourceful year-end giving.Write a check. At the Foundation, we always appreciate cash because we are able to use your gift immediately for our pressing needs.Be Aware of Gift Dates
Charge your credit card. A fast and easy way to make year-end gifts is simply by calling us at 612-625-1440 or 1-800-922-1663.
Contribute securities that you have owned for more than one year. If they are worth more than what you originally paid for them, you can claim deductions for their full fair market values and avoid any tax on the appreciation.
Prepay a pledge, either the entire amount or an upcoming installment.
Invest in a life income plan that provides you with income security for the rest of your life and ultimately benefits Minnesota Medical Foundation. If you use long-term appreciated securities to fund the plan, you will be entitled to an income tax deduction based on the charitable portion of the securities' full value, in addition to avoiding up-front capital gains taxes.
Take a capital loss yourself by selling your securities that are worth less now than when you purchased them. You can take a capital loss on your tax return to the extent allowed by law and then contribute the proceeds. If you donate these securities directly to the Foundation, you will not be entitled to take the capital loss.
Give real estate, artwork and other tangible personal property. Give property that would have resulted in the greatest capital gain if you would have sold the asset instead.
Donate an insurance policy. A gift of a life insurance policy you no longer need makes a perfect year-end gift. To qualify as a deductible gift, the Foundation must become the policy owner. For most types of insurance policies, your tax deduction is usually the cost basis or the fair market value of the policy—whichever is less.
The gift date, or the date used for tax purposes, is the day you transfer control of the asset. Keep the following guidelines in mind as you consider your gift.
Checks: The mailing date is the date of the gift.Always Seek Counsel
Credit cards: The day the charge is authorized is considered the gift date.
Pledges: Pledges are deductible in the year they are fulfilled and not the year the initial pledge is made.
Securities:Real estate: The day you deliver the signed deed to us is the date of the gift. If your state law requires recording of the deed to complete the gift, though, then the date of recording is the gift date.
- If electronically transferred, the gift date generally is the day the securities enter our organization's account.
- If hand-delivered, the day they are delivered to Minnesota Medical Foundation or our broker is the date of the gift.
- If mailed, the mailing date is the gift date. Make sure to send, by registered or certified mail, the unsigned certificates in a separate envelope from the signed stock power and letter of intent. Stock market fluctuations after the date of delivery will not affect your charitable deduction.
Artwork and other tangible personal property: The gift date is the day you hand-deliver the property with a signed document transferring ownership, if necessary.
Discuss your charitable gift plans with your financial and legal advisors so you can better determine what suits your needs while benefiting Minnesota Medical Foundation. We are also able to assist you with information to share with your advisors. Simply contact The Office of Gift Planning at 612-625-1440 or 1-800-922-1663 or giftplanning@mmf.umn.edu for more information.
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The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.
