Appreciated Assets

Donating long-term appreciated assets directly to the Federation – rather than selling the assets and then donating the cash proceeds – is one of the easiest and most tax-efficient ways for you to give. 

You may significantly increase the amount of your gift to the Federation by taking advantage of applicable tax benefits, most notably that you will be able to generally deduct the fair market value of the asset and avoid paying capital gains tax (deductions for gifts of appreciated property are limited to 30% of your adjusted gross income, but the excess may be carried forward for five years). 

Marketable Securities

Outright gifts of marketable securities are quick and easy and quite popular. Marketable securities include stocks, bonds, and mutual funds. Using stock is an excellent way to make charitable contributions. Here are some tips on how best to use stock as a charitable gift:

  • Donate long-term appreciated stock, that is held for more than one year, and you may deduct its fair market value. Because it is a gift and not a sale, you avoid capital gains tax (for stocks that have been held less than one year, you can only deduct your adjusted cost basis).
  • Consider choosing appreciated stock with the greatest capital gain to take maximum advantage of this tax savings.
  • Appreciated stocks may be used to make outright charitable gifts or used for life income gifts, such as charitable gift annuities and a charitable remainder trusts. In these situations, you get a current charitable deduction and enjoy an income stream from the property for yourself or a loved one.

Closely Held Stock

Gifts of closely held stock are particularly relevant for many of our supporters here in the Bay Area. The unique advantage of these gifts is that, after the gift has been made, the corporation may buy back the stock and retire it, so long as there is no prearranged sale. Because you would owe no capital gains tax, the greater the amount of accumulated profits the greater the tax advantages of this type of gift.  

Real Property

Gifts of real property may take several forms. In addition to outright gifts of real estate, real estate may possibly be used to fund trusts and gift annuities.  

  • Gift of a remainder interest in a personal residence (or farm)
    With a retained life estate, you retain the right to use the property for the duration of your lifetime, and then the property passes to the Jewish Community Federation. You get an upfront income tax deduction equal to the present value of the future remainder interest without the expenditure of any cash or the reduction of income.
  • Gift of a Fractional Interest in Real Estate

Tangible Personal Property

Those types of tangible personal property that are typically used to make charitable gifts include artwork, antiques, jewelry, and other objects. The full market value of the asset may be deducted, provided that the asset is used for the Jewish Community Federation’s exempt purpose. If the item cannot be put to our exempt purpose, then your deduction is limited to your adjusted cost basis.

Life insurance

There are a few ways to make a gift using life insurance. You may donate a paid-up policy from which you no longer need the benefits. Or, you may purchase a new policy and designate the Jewish Community Federation as both the owner and beneficiary of the policy. Finally, you may choose to purchase additional life insurance, for the benefit of your heirs, to offset the value of charitable gifts made from your estate.

 

For more information, please contact:
Joy Sisisky
Chief Philanthropy Officer
415.512.6428