Planned Giving

Planned Giving for Financial Advisors

Income Tax Charitable Deductions

The advice that you give your client relies in part on the tax consequences of the investments, transfers, and estate plan that you and your client develop.

We are pleased to provide a synopsis of the income, gift and estate tax rules that apply to your client's charitable giving. For purposes of these examples, your client is also referred to as the "donor."

A Brief Summary of Income Tax Charitable Deduction Rules

As you know, your client will be entitled to claim an income tax charitable deduction for contributions made to Gaylord Hospital. In most cases, that deduction will be based on the fair market value of the charitable portion of the property contributed. In all cases the amount of the deduction that can be claimed in the year of contribution will be limited to a certain percentage of your client's adjusted gross income (AGI).

Click for an overview of those rules for gifts to Gaylord Hospital:

Property ContributedValue of DeductionAGI limit (public charity)
CashFair Market Value (FMV)50%
Appreciated stock (owned >1 year)FMV 30%
Appreciated stock (owned < 1 year) Cost Basis30%
Real estateFMV30%
Business interestsFMV30%
Life insurance policy FMV30%
Tangible Personal Property (must meet charitable use test)FMV (unless created by donor)30%
“For the use of” Gaylord Hospital (includes, for example, life insurance premiums paid and remainder interests in charitable trusts and gift annuities) FMV 30%

Please note that the deductions rules for non-public charities and private foundations differ. Any unused deduction in the year of the gift may be carried forward for the following five years, which means that your client has a total of six years over which she may claim her deduction.

Your client must have written documentation to support a claimed charitable deduction. Gaylord Hospital will send your client a receipt acknowledging the cash or property received and reporting the fact of any goods or services your client received in exchange for her contribution.

For contributions of non-cash property worth more than $500, your client will be required to file a Form 8283 as part of her income tax return.

In addition, for non-cash contributions (other than marketable securities) valued at more than $5,000, your client may be required to obtain and pay for an independent, qualified appraisal that follows all of the rules set forth in Treasury Regulation section 1-170A-13(c)(1)(i).

The material presented on this Planned Giving website is not offered as legal or tax advice.
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