The IRS has established rules that allow tax deductions for
charitable donations. These laws allow you to support charitable
organizations, like your church or KML, and receive a tax benefit at the
There are also laws that allow you to make charitable donations
through your estate plan that provide additional tax benefits. Your tax
consultant or financial planner can suggest options that work for your
specific estate, but here is some basic information for your
Appreciated Property – When stocks, mutual funds,
real estate or other property has gained in value, you are responsible
for taxes on the capital gains. By donating appreciated property, you
could qualify for a tax deduction on the donation, and also avoid the
taxes on the capital gains.
IRAs/401(k)s – These investment options encourage
people to save for retirement while reducing their tax burden. The money
is then taxable at the time of withdrawal. When the funds from these
retirement funds are designated within an inheritance, the money might
become taxable as a lump sum. When money from these types of funds is
used as a charitable donation, the government allows the transfer to
occur without collecting taxes. (Note: this information does not apply
to Roth IRAs.)
Government Savings Bonds – Savings bonds present an
interesting option for a charitable donation. If you redeem a savings
bond and donate the money to charity, the interest from those bonds will
be taxable to you. If you pass savings bonds to your heirs, they will
be required to pay taxes on the interest. If, however, you pass the
savings bonds to KML or other charitable organization through your will,
there will be no taxes due on the earned interest.
Life Insurance Policy – A life insurance policy can
be a great way to support KML or other charitable organization. The
annual premiums require a relatively small investment compared to the
benefit that is provided upon death. A donor can also save on current
taxes by designating the charity as the owner and beneficiary. When the
charity is named as the owner, the government allows certain deductions
on the cash value of the policy as well as the premium payments.
Charitable Remainder Annuities and Trusts – Within
these gift options, there are four unique parties – the donor, the
trustee, the beneficiary, and the charity. The donor contributes money
to a trust and selects a trustee to manage the funds. The beneficiary
receives income from the fund for a pre-determined length of time, and
the charity receives the remainder of the fund at the end of that time
period. By naming KML as the charity, you can provide financial support
to your loved ones, make a charitable donation to KML, and receive tax
benefits on the donation.
To discuss a planned gift to KML, contact your KML Estate Plan and Deferred Gift Counselor,
Paul Snamiska, at 262-677-4051 x1116 or firstname.lastname@example.org.
The information that is provided on this site is for educational purposes only. Consult your personal tax consultant, attorney, or financial planner for specifics that apply to your personal situation.