Year-End Charitable Gift Planning Ideas

A brief guide to the advantages of giving on or before December 31, 2015.

Year-End Gift Ideas

As you review your 2015 year-end tax planning, we hope you will consider making good use of the income tax charitable deduction. Your year-end gift to the Jewish Federation of Cleveland may significantly reduce your income taxes, while providing meaningful support for the beneficiaries of Federation agencies and programs.

GIFTS OF CASH

If you itemize, you may lower your yearly income taxes simply by mailing a check to the Federation by December 31. There is no easier way to secure a year-end charitable deduction and support the Jewish community at the same time! Make sure your envelope is postmarked by December 31; if it is, your gift will be deductible for 2015.

Gifts of cash are fully deductible – up to a maximum of 50% of your adjusted gross income. For example, if your adjusted gross income for the current year is $100,000, up to $50,000 of charitable gifts may be deducted. Any excess can generally be carried forward and is deductible over as many as five subsequent years.

If your company or firm has a matching gift program, enclose the form along with your check, or let us know and we will be happy to follow up.

GIFTS OF SECURITIES

Making a gift using appreciated securities generally offers a two-fold tax savings. First, because the Federation is a charitable organization, when you make a gift of securities, you avoid paying any capital gains tax on the increase in the value of the securities you transfer to the Federation. Second, you may receive an income tax charitable deduction for the full fair market value of the securities at the time of the gift.

Make sure you have owned the securities for more than one year to qualify for these significant tax advantages. To qualify for a year-end deduction, your gift of securities needs to be delivered to the Federation by December 31.

A stock broker or trust officer can arrange to transfer a year-end gift of securities from your account to the Federation.

Gifts of appreciated securities are fully deductible – up to a maximum of 30% of your adjusted gross income. And, as with a gift of cash, any excess can generally be carried forward and is deductible over as many as five subsequent years.

Please note, if you choose to contribute mutual fund units to the Federation, you will receive the same tax advantages as if you donated appreciated stock. However, because of the complexities involved in the transfer of mutual fund shares, we encourage you to begin the transfer process well in advance of December 31, 2015.

DONOR ADVISED FUNDS

A donor advised fund is a named fund of the Jewish Federation of Cleveland in which you, as the donor advisor, retain the privilege to make recommendations for charitable grants from the fund.

You can create a donor advised fund by making an irrevocable gift of cash, securities, or other property to the Federation. You may receive an immediate income tax deduction for the amount of the initial gift and on each subsequent gift to the fund.

The fund is invested and generally no tax is paid on the income generated by the fund. You may make charitable grant recommendations to qualified public charities from both income and principal. If you’d like, you may also include your spouse or children as advisors to the fund.

Additionally, this type of fund may be established with a minimum gift of only $100. Additional contributions may be made at any time and distributions from the fund may be recommended at any time. The minimum grant recommendation is $100.

Create Your Jewish Legacy

Include the Federation in your estate plan. A planned gift of any size will continue to make an important difference in our community.

BEQUESTS

Giving through your estate plan is often easy.The Federation may be named as a benefi-ciary in a will or trust, often by codicil or amendment without the need to redraft the will or trust. You can specify how you would like the Federation to allocate your estate gift. For instance, you might direct that your gift be used to augment the Federation’s unrestricted endowment fund, create a named endowment fund in a specific field of interest, or establish a FOREVER or Lion of Judah Endowment fund to perpetuate your annual contribution to the Campaign for Jewish Needs.

Each of these designations enables the Federation to provide support to Jewish people in our community and around the world.

LIFE INSURANCE POLICIES & RETIREMENT PLANS

You may make the Federation the owner and beneficiary of a life insurance policy or a beneficiary of all or part of your retirement plan account at your death.

It is easy to accomplish this objective by asking your life insurance agent or retirement plan administrator for the appropriate forms. (Please note: retirement assets may be the most heavily taxed asset in your portfolio and make an excellent gift choice.)

LIFE INCOME GIFTS

A “life income” gift provides annual income for a term of years or for life to you and/or a beneficiary you designate. One of several “life income” gifts may be appropriate for you if you own stocks, bonds, or certificates of deposit that are paying little in interest or dividends.

If you have already considered a provision in your will or trust for the Federation, a life income gift often allows you to accomplish your goals during your lifetime, earn a stream of income, and receive tax advantages.

Charitable Gift Annuity

Created with a gift to the Federation, it is an agreement with the Federation to pay a specified annuity payment for the lifetime of the donor or donor’s designee. A portion of the annuity payment may be tax-free. The combination of a fixed payment of partially tax-free income and the initial charitable deduction makes this arrangement quite attractive. In the year the annuity is created, there may be an immediate tax deduction. (Please note there is a $5,000 minimum to establish.)

Charitable Remainder Trust

Created with a gift of cash, securities, or other property to a trust, it pays a donor or donor’s designee an income for a stated period. The principal (the remainder) goes to the Federation at the end of the trust’s term of years or upon the beneficiary’s death. In the year the trust is created, there may be an immediate income tax deduction. (Please note there is a $100,000 minimum to establish.)

For Further Information

Please contact Carol F. Wolf at 216-593-2805 or cwolf@jcfcleve.org, or Matthew A. Kaliff at 216-593-2831 or mkaliff@jcfcleve.org. All inquiries are confidential.

Thank you for your support at year-end and throughout the year.

This material is presented for informative purposes only and should not be construed as legal, tax, or financial advice. When considering gift planning strategies and year-end gift opportunities, you should always consult with your own legal, tax, or financial advisors.

The Jewish Federation of Cleveland (license # CH22328) is registered to solicit charitable donations within Florida and provides disclosure as required by Chapter 496 of the Florida Solicitation of Contributions Act as follows:

“A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE (800-435-7352) WITHIN THE STATE OR BY VISITING WWW.800HELPFLA.COM. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL OR RECOMMENDATION BY THE STATE.”

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