Year-End Gifts Benefit You and Glenmary!

This article was prepared for Glenmary's friends to provide information about current developments in tax and financial planning. Legal and tax principles pertaining to an individal situation should be discussed with one's own tax advisor.

Your “to-do” list is probably tripling in size as the holidays approach. But think about adding one more item: make charitable donations.

If you donate before year’s end you will see a tax break for 2007 when you itemize deductions on your federal (and, if applicable) state tax returns.

Year-End Giving Strategies
The end of the year is your last opportunity to reduce current-year income taxes. Some gifts provide particularly attractive tax benefits while others combine these tax benefits with an income stream for life. Here are some smart year-end giving strategies.

Determine how much you wish to donate. In order to do this, you may want to begin by considering these questions:
• How much have I/we already given this year in charitable contributions?
• Does this amount meet/exceed my/our intended target for charitable contributions for the year?
• Have my/our circumstances changed in a way that I/we can contribute more?

Give appreciated securities. When you give appreciated securities you’ve held more than one year, you can claim deductions for their full fair-market values and avoid any tax on appreciation.

The fair-market value for securities is generally the mean between high and low on the date of delivery. For mutual fund shares, their fair-market values are their redemption prices.

If you give appreciated securities as a year-end gift, please pay close attention to the delivery date as it determines the year of deduction. For securities, the date of delivery determines both their valuation and the year of deduction. To be effective, delivery must be unconditional and the stock certificate must be properly endorsed or a separate stock power must be provided.

If your gift is personally handed to our agent, or to someone in Glenmary’s Planned Giving Office, that’s the delivery date. If mailed to us, the date of mailing as postmarked on the envelope is the delivery date.

If you arrange for the certificate to be reissued in our name, delivery is effective on the date when the security is transferred to us on the corporation’s books, so be sure to allow enough time.

Invest in a life income plan. These plans allow you to retain the security of income for the rest of your life while supporting our home mission work.

If you use appreciated securities to fund the plan, you get multiple tax benefits. You will be entitled to an income-tax deduction based on the full-appreciated value of the securities and you will avoid capital gain taxes otherwise payable on the sale.

Take capital loss yourself. If you own securities worth less now than when purchased, sell them and contribute the proceeds. This way, you can take a capital loss on your return, which you can’t do if you donate those securities directly to us.

Make a gift of Individual Retirement Account (IRA) savings. The Pension Protection Act of 2006 (PPA 2006), set to expire on Dec. 31, 2007 (unless extended by Congress), includes a special rule to encourage the use of IRAs for charitable gifts.

Under the law, a donor who is 70½ or older at the time of the charitable gift can make charitable distributions directly from an IRA of up to $100,000 per year (to one or more charities) without having to report the IRA distributions as income. The donor claims no charitable deduction.

If both a husband and wife have IRAs, each may take advantage of this allowance to the fullest extent. This means that a couple could conceivably make a gift of $200,000.

Although this law does not allow charitable gifts from 401(k), 401(b) and other retirement plans, amounts distributable from these plans generally can be rolled into an IRA and then donated to charity as described above.

If you are interested in making a charitable gift to Glenmary using your IRA, we can help complete the gift by coordinating the IRA charitable rollover with your IRA custodian.

Ceilings and Carryovers
The tax code limits your charitable deduction each year to a percentage of your adjusted gross income, depending on the type of gift. But for each type of gift you’re allowed a five-year carryover of any “excess” deduction for use in subsequent years.

For a gift of money, you can deduct the amount up to 50 percent of your adjusted gross income.

On a gift of appreciated securities or real estate held long-term, you can deduct the valuation up to 30 percent of your adjusted gross income. (By electing to deduct only the cost of that asset, you can increase the ceiling to 50 percent.)

For a gift of tangible personal property, such as art or antiques, the ceiling depends on the relationship of the use of the gift to the charity’s exempt function.

An example is a gift of a painting to an art gallery. A related gift is deductible at current fair-market value up to 30 percent of your adjusted gross income (or 50 percent if you make the same election as for a gift of long-term securities or real estate, as discussed above). For a gift put to unrelated use by the charity, your deduction is for the lesser of the cost basis or current fair-market value, up to 50 percent of your adjusted gross income.

Year-End Giving FAQ
Question: Is my gift to Glenmary Home Missioners tax deductible?
Answer: Yes. Because Glenmary is qualified as a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code, all gifts to the Glenmary are tax deductible. For how much you can deduct, consult your tax advisor.

Question: Do I need a receipt to claim a tax deduction?
Answer: Under new IRS rules, you cannot claim a tax deduction for a contribution of cash or other property made on or after Jan. 1, 2007 unless you maintain a record of the contribution in the form of either a bank record (such as a cancelled check) or a written communication from the charity (such as a receipt or a letter) showing the name of the charity, the date of the contribution, and the amount of the contribution.

In addition, for a single gift of $250 or more, you are required to have a receipt from the charity to substantiate your claim.

If you make a quid pro quo contribution—that is, when you receive goods or services in exchange for a portion of your gift—Glenmary is required to issue you a receipt specifying the amount of the contribution and the goods and/or services received. For example, if you attend a benefit dinner for Glenmary and your charitable contribution includes the cost of the dinner, then that cost must be subtracted from your charitable deduction.

Question: Does the receipt have to be a physical note?
Answer: No. An electronic receipt is just as acceptable as a letter or postcard.

Question: When will I receive my receipt from Glenmary?
Answer: Receipts are issued as quickly as possible as gifts come in. Most receipts—even those for gifts made on Dec. 31—Are issued by the end of January to help donors prepare for their taxes. If you make an end-of-year gift and do not receive your receipt by early February, please contact Glenmary’s Development Office.

Question: Do I need to provide a receipt to the IRS?
Answer: No. Just keep your receipt in a file to support your claim in case you are audited. The statute of limitations for the IRS is generally three years, so retain the receipt for at least that long. Depending on what type of contribution you make, you may want to keep it longer. Consult your tax advisor for details.

Question: Where on my federal tax return can I deduct contributions to Glenmary?
Answer: Most gifts can be claimed on Form 1040, Schedule A, Itemized Deductions, under the section Gifts to Charity (lines 15-18). These gifts include cash and non-cash contributions.
Please note that you will need to itemize your deductions (and not take the standard deduction) in order to take a deduction for charitable gifts, except for IRA rollover charitable distributions.
If you have a non-cash gift over $500, use Form 8283, Non-Cash Charitable Contributions.

Question: What is the last day I can make a contribution in 2007?
Answer: It depends on your gift. If you contribute by credit card using Glenmary’s online giving option you have until midnight, Dec. 31. Your credit card must be charged in the same tax year that you want to claim a deduction.

If you mail your check, the postmark (and not just the check) must be dated on or before Dec. 31 to qualify for a 2007 deduction.

If you donate securities and your broker is executing the transfer, allow a minimum of a week for the securities gift to be transferred to Glenmary.

We Can Help
As you can see, your tax benefits depend on what you give and when you give it. We will assist you and your financial advisors with the planning and details of making a gift to help support our home missions and ministries. And, as always, we encourage you to consult your professional tax advisors before you make a gift.

As the season of reflection and generosity approaches, please accept the thanks of the Glenmary priests, brothers and coworkers, for your generous support of our home mission ministry.

May the blessings of the Christ Child be showered on you and your family through the Christmas season. And may the blessings of health, happiness and prosperity be yours in the new year

For more information about making a year-end gift to Glenmary, contact Planned Giving Office Susan Lambert at 800-935-0975 or slambert@glenmary.org.

To make a secure online donation now