Consider these 12 options to minimize your tax liability while maximizing your charitable gift.
A simple and common way to give, cash donations are tax-deductible if you itemize in the year of contribution. The MSU Foundation offers an online donation form. (Under "Designations", please select "Other", and enter "University Libraries" in the text field.)
Bequeath money, property, or a percentage of your estate to MSU Libraries.
Give stocks that have increased greatly in value, particularly those producing a low yield. If you have owned them longer than one year, you will pay no capital gains tax on the transaction, and you can deduct the full fair market value.
Bank Accounts and Certificates of Deposit
Name us as the "payable-on-death beneficiary" of your bank accounts or CDs. The assets are yours to use; upon your death, they pass directly to us without going through probate.
Retirement Plan Assets
Tax laws often subject retirement plan assets to income taxes upon a person's death, so leaving all or some of your retirement plan to MSU Libraries may be your most efficient estate planning option. You may be able to avoid income taxes up to 35%, while passing on more tax-favored assets to your family.
Charitable Gift Annuities
This is a simple contract between you and MSU Libraries that pays a fixed dollar amount for your lifetime and increases with your age. If you use appreciated property to fund the gift annuity, you will escape the capital gains tax on the gift portion of the transaction, you can spread the remaining capital gains tax over your estimated life expectancy, and you receive a partial income tax deduction.
Charitable Remainder Trusts
A charitable remainder trust pays a fixed or variable income to the donor. The payments are made either for life or a period of time not to exceed 20 years. At the end of the trust's term, the balance in the trust supports our mission. You'll also receive a partial income tax deduction.
Charitable Lead Trusts
This type of charitable trust pays income to one or more charitable organizations, typically for a period of years, after which the remaining trust assets pass to family members.
This is a simple donation if you own property that is not mortgaged, has appreciated in value, and you no longer need or use. You can deduct the fair market value of your gift and eliminate all capital gains taxes. Plus, you remove that asset from your taxable estate.
Retained Life Estate
You can transfer the deed of your personal residence or farm to us now and keep the right to live in and use the property for your lifetime. You will receive a current charitable deduction in an amount that is based on your life expectancy and the value of the property.
In this scenario, you agree to sell property to a charity at less than its fair market value. The difference between the sale price and the fair market value is your charitable deduction. The net result is often more favorable than selling the property at fair market value and making a charitable contribution from the capital gain.
Rather than cancel policies you no longer need, you could name us as the beneficiary, or simply donate the policies outright.