There are many charitable gift plans that professional advisors can structure which will create more tax-favored income while allowing support of a favorite charitable institution. Here are two quick ideas:

1) Contribute securities or cash in exchange for a charitable gift annuity. the tax benefits of this kind of investment, a Charitable Remainder Trust (CRT), are especially attractive for those over age 65.

2) Contribute cash or other assets to a charitable remainder unitrust. You receive a current deduction plus a continuing income equal to a percentage of trust principal as revalued each year.

Any charitable contribution must meet specific IRS guidelines with respect to documentation and substantiation of the fair market value of the contributed property. The credentials of the valuation expert should be of paramount importance because the burden of establishing fair market value is on the taxpayer. The expert established the credibility of the valuation to both the IRS and the court. Failure to meet the qualified appraiser requirements can result in the loss of the charitable contribution deduction regardless of whether or not the property was correctly valued.

Be sure that the closely held stock or other asset contributed has been valued by a qualified appraiser before the contribution is made. Regulations require that the valuation date of the appraisal be no earlier than 60 days before the date of the charitable contribution.

In addition to filing IRS form 8283 with the signature of a qualified appraiser like MPI, a statement from the appraiser indicating that he presents himself to the public as an appraiser and that he performs appraisals on a regular basis is required. The appraiser may not be employed by the donor or the donee or be a party to the transaction.

back to library