(1) What assets can I use to make a gift to Hanul Family Alliance?
(2) What sort of gift plans also return income to me?
(3) What tax deduction will I receive for my gift?
(4) I want to set up a life insurance policy, name as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
(5) I’ve heard that transferring gifts of IRA assets to charity are advantageous. Why?
(6) I'd like to donate a painting. Will you determine its value for my income tax deduction?
(7) I'm interested in establishing a charitable gift annuity. What financial provisions will you make for the income payments to me and my spouse?
(8) If I create a bequest or life-income gift, will you continue to ask me for annual contributions?
(1) Appreciated Property
Securities, real estate, or any other property that has risen in value since the benefactor acquired it. Generally, appreciated property held by the donor for a year or more may be donated at full fair market value with no capital gains cost.
A contractual arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift annuity is a gift to Hanul Family Alliance that secures fixed lifetime payments to the benefactor and/or another individual.
(3) Adjusted Gross Income ("AGI")
The sum of an individual’s taxable income for the year is the total at the bottom of the first page of Form 1040. Individuals may deduct charitable cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities and appreciated property up to 30% of AGI.
An assessment of the value of a piece of property. Benefactors contributing real or tangible personal property (art, books, collectibles, etc.) must secure an independent appraisal of the property to substantiate the value they claim as a charitable deduction.
The benefactor’s purchase price for an asset, possibly adjusted to reflect subsequent costs or depreciation. If Mrs. Smith bought stock for $100 per share and sold it for $175, her cost basis in the stock is $100 per share.
The recipient of a bequest from a will or a distribution from a trust.
A transfer of property or cash to an individual or organization under a will.
(8) Capital Gains Tax
A federal tax on the appreciation in an asset between its purchase and sale prices.
A simple amendment to a will which avoids the cost and complication of re-writing the entire will. The codicil must be signed and witnessed or notarized as is the original will.
(10 )Cost Basis
See Basis, above.
(11) Estate Tax
A federal tax on the value of the property held by an individual at his or her death (paid by individual's estate, not the heirs or recipients of bequests). In contrast, state inheritance tax is applied to the value of bequests passing to beneficiaries; it is also paid by the estate before the distributions are made.
The person named in a will to administer the estate (known in some states as the "personal representative").
(13) Fair Market Value
The price that an asset would bring on the open market.
The individual transferring property into a trust.
(15) Income Interest
In a trust, the right to receive payments from the trust for lifetime or a term of years.
(16) Income in Respect of a Decedent (IRD)
Taxable income earned by a decedent, but was not yet received (nor taxes paid) before death. Common IRD sources are income from IRA's or other qualified plans, income from a commercial annuity or interest earned on E Bonds.
(17) Living Trust
Also "Revocable Living Trust". A trust that is created by a living individual (grantor) that is used to manage assets for the benefit of the grantor and/or other persons. At the grantor's death the assets in the trust are passed to any named beneficiaries or the trust can continue to operate providing benefits to beneficiaries for their lives or for a predetermined period of time.
(18) Personal Property
Securities, artwork, business interests and items of tangible property as opposed to "real property," used in planned giving to refer to land and the structures built on it.
(19) Personal Representative
See Executor, above.
(20) Planned Giving
Also "Gift Planning." The process of charitable giving in light of financial, estate and/or tax planning. Such gifts often require the assistance of an attorney, financial professional or planned giving officer.
The court which determines the validity of a will and provides judicial oversight over the distribution of the estate. If there is no valid will then the Probate Court will appoint an administrator of the estate to facilitate the estate's distribution in accordance with state law.
(22) Qualified Appraisal
A written appraisal conducted by a knowledgeable professional to determine the fair market value of property (other than marketable securities) donated to a charity. If the donor wishes to use the value of the donated property for a charitable income tax deduction, the appraisal must be obtained by the donor and attached to his/her tax return only if the property has a value of $5,000 or more.
(23) Related-Use Rule
If a donor can receive a charitable income tax deduction for the full fair market value of donated tangible personal property, the property must have a use to the charity that is related to their tax-exempt purpose. Otherwise the deduction is limited to the donor's cost basis.
(24) Remainder Interest
In a trust, the portion of the principal left after the income interest has been paid to the beneficiary(ies). A charitable remainder trust pays income to the benefactor or other individuals and then passes its remainder to charity.
A legal term for the individual or organization who receives the trust principal after the income interest has been satisfied.
(26) Stepped-Up Basis
When an individual inherits property from a decedent, the property's cost basis is stepped-up to its fair market value on the date of death, and thus the heir receiving the property would avoid any capital gains tax if he/she were to immediately sell the property.
(27) Testamentary Trust
A trust that is created and goes into effect only when an individual dies. Such a trust is usually set up under the terms of a will.
The individual making the will.
A transfer of property by the grantor to the care of an individual or organization, for the benefit of the grantor or others.
An individual or organization carrying out the wishes of the person who established the trust (the "grantor"), paying income to the beneficiaries and preserving the principal for ultimate distribution.