Creative Generosity Now
NON-CASH ASSETS: YOUR OTHER 90%
Scientists tell us that only about 10% of an iceberg is visible above the water’s surface. The great mass, which is 90% of the iceberg, is below the surface and hidden from view. Quite often, the Christian steward’s assets (or estate) are similar to an iceberg with approximately 10% in cash (liquid assets) and the remaining 90% being non-cash, non-liquid assets.
For generous stewards, this can lead to the highly frustrating thoughts. Regardless of income, nearly everyone reaches the point of thinking they cannot to give any more cash.
Are there options for the giver who has reached their personal cash limit? Yes! For many, the other 90% of their financial assets holds the key to giving to their heart’s desire.
COMMON NON-CASH GENEROSITY OPTIONS
As a general rule, if the asset has an ascertainable value and is commonly bought and sold, it may be possible to use it to fulfill your generosity desires. However, some assets have complicated tax and ownership rules that make their use as a charitable gift less desirable or are prohibited.
Here is a partial list of non-cash assets that are commonly used to make generous charitable gifts.
Tangible Property: Physical property that can be moved
Artwork, automobiles, boats, RVs, motorcycles, and collectibles such as jewelry and coins are all tangible items that can be used to make charitable gifts. Specific valuation and deduction rules apply making each item more or less valuable as a gift for the giver.
However, once converted to cash, or put to use by the ministry, tangible items can be very valuable to accomplish the ministry purpose and mission.
Securities: Investments in the stocks, bonds, or mutual funds
The simplest securities to donate are those traded on a public stock exchange or market.
When you make a gift of appreciated stock to ministry, you will receive an income tax charitable deduction for the value of the stock on the date of transfer. In addition, if the stock has appreciated in value, you pay no capital gains tax on the appreciation (as you would if you sold the stock).
Please contact us
for information needed to have your broker transfer the shares to the ministry’s account.
Individual Retirement Accounts: Commonly referred to as an IRA
If you are at least 70.5 years of age, you can make a Qualified Charitable Distribution (QCD) from your Individual Retirement Account (IRA) to your favorite ministry. You will need to request that your IRA custodian send the distribution directly to the ministry. Since you do not receive the distribution, you will not have to claim it as income. The qualified charitable distribution can be up to $100,000, and can be used to meet your required minimum distribution for the year.
We have prepared a comprehensive eBook on the topic and you can read it by clicking here
Real Estate: Buildings and land
Real estate gifts can be of houses, land, condominiums, vacation homes, commercial buildings, or most any type of real property. Transfer of real estate is made by deed to the ministry. You receive an income tax charitable deduction for the fair market value at the time of transfer (determined by independent appraisal), and there will be no capital gains tax implications to the transfer.
If you are considering a gift of real estate, please contact us
to discuss condition, marketability and any conditions for acceptance.
Commodities: The most common is a gift of grain from an active farmer
A cash-basis farmer can gift grain to ministry. When the grain is delivered to the elevator or warehouse, all the paperwork must show the ministry as owner. The charitable organization must direct the sale of the commodity and will receive the cash proceeds of the sale.
You will not receive a charitable tax deduction for the gift, but the value of the donated grain will not be reported to you as taxable income, potentially reducing federal state and self-employment taxes.
Life Insurance: Policies can be gifted to ministry during lifetime or name ministry a beneficiary
If you have life insurance that you no longer need you can gift your policy to ministry. To make a gift during lifetime, you will need to transfer ownership, making the ministry irrevocable owner and beneficiary. The ministry can choose to hold the policy until death or surrender it and put the cash to work doing its mission today. To make a gift of life insurance through your estate, you can name the ministry as beneficiary of the policy.
If you have life insurance policies that are no longer needed for their original purpose—consider the possibility of making a gift to ministry. You may find your policy is a perfect tool for increasing your generosity to your heart’s desire.
When your desire is to increase your generosity—consider the other 90%—your non-cash assets.