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The Harford Community College Foundation, Inc. welcomes
charitable trusts, outright gifts of securities, real
estate, and tangible personal property (jewelry, paintings,
etc.) and bequests. Planned giving enables a donor to
arrange charitable contributions in a manner that maximizes
his or her personal objectives while minimizing after-tax
costs. Planned gifts are becoming an increasingly important
source of the Foundation's quality growth. The Foundation
offers a variety of giving opportunities on behalf of HCC in
support of facilities, scholarships/grants, specific
department/division projects, and unrestricted resources to
foster growth and excellence.
You Choose Your Favorite Charity
A good estate plan can involve a number of tools, which
can often result in a larger inheritance for heirs. An
estate planner can recommend a number of tools to help make
a planned gift to the Harford Community College Foundation,
Inc. The following examples are meant to encourage
discussion and are not intended to replace advice given by
your counsel.
Reduce or eliminate estate and gift taxes through planned
giving. Charitable giving can be a part of estate planning.
The Harford Community College Foundation, Inc. urges
discussion with financial and legal advisors.
Gifts of Cash
Lower income taxes by making a gift of cash, which is
fully deductible to a maximum of 50% of adjusted gross
income (AGI). Any excess can generally be carried forward
and deducted over as many as five subsequent years.
Gifts of Appreciated Securities
Gifts of appreciated securities provide immediate benefit
to the College and, in many cases, tax deductions for the
donor. Capital gains taxes can be avoided, and often the
full-market value of appreciated securities can be deducted
if they have been held for longer than six months. Save
in two ways! A contribution of securities with long-term
capital gains (property held for more than one year) earns a
charitable deduction equal to the property's full fair
market value (subject to a limit of 30% of adjusted gross
income). Consult a tax advisor.
An outright gift of securities also avoids capital gains
tax on the property's appreciation. A gift of securities can
be designated to benefit the Harford Community College
Foundation, Inc. There are several ways to transfer
securities, ultimately depending upon how the securities are
held (e.g. street name, physical certificates, etc.).
If making an electronic transfer it is imperative to
contact Brenda Morrison the Vice President for Marketing,
Human Resources and College Relations, at 443-412-2409, so the gift can be properly
acknowledged and applied to the designated program.
Electronic transfers give no indication where or from whom
the stock came in an electronic transfer to the Foundation's
account. Note: An electronic transfer is not immediate.
It may take days from the time a transfer order is placed.
The value of the gift of securities will be credited, by
law, at the mean between the high and low of the securities
on the day the shares appear in Foundation's account. If
time is of the essence, alert the College staff when calling
for instructions.
Mutual Fund Shares
Mutual fund shares are subject to additional regulatory
requirements and may take longer to complete (up to ten
weeks); allow plenty of time to make this gift.
Closely-Held or Restricted Securities
Gifts of stock in a closely-held corporation usually
allow donors the same benefits as the contribution of other
securities; however, Internal Revenue Service and Securities
and Exchange Commission rules must be strictly observed, and
the donor must obtain an appraisal. Such gifts may take time
to transact. Contact the Development Office when considering
such a gift.
IRA Beneficiary
Name the Harford Community College Foundation, Inc. as
the primary beneficiary or contingent beneficiary of your
IRA. The IRAs are designed as a to benefit during your
lifetime, not as a means to pass on wealth to heirs.
Consequently, IRAs are heavily taxed as they move to the
heirs. Since the goal is to use most if not all of your IRA
to support your life-style, consider designating the charity
of your choice as the recipient of the small remainder of
the IRA at the time of death? Consult a tax or financial
planning advisor for more information.
Gifts of Real Estate and Other
Personal Property
A gift of real estate can also be tax wise. A residence,
vacation home, farm, acreage or vacant lot may have so
appreciated in value through the years that its sale would
mean a sizable capital gains tax. By making a gift of this
property instead, capital gains tax, can be avoided. At the
same time, the donor can receive a charitable deduction for
the full market value of the property. Under certain
circumstances, the donor may reserve the right to continue
to occupy the home for a specified number of years or for
the donor's lifetime (retained life estate) and still
receive a charitable deduction.
Tangible personal property - art, antiques, rare books,
coins, stamps, jewelry - offers another way of giving.
Contributed property will generally be sold to benefit the
program that you designate or, if not designated, will fund
most needed activities.
It is also possible to make a gift of your home, farm or
vacation home so that the donor and spouse can continue to
use it for a lifetime while receiving a current income tax
deduction.
Example: Mr. and Mrs. Brown own a vacation home they would
like to continue using. The fair market value of the
property is $100,000. By contributing the at this time, but
retaining the exclusive right to use it for the rest of
their lifetimes, the Browns are able to achieve a current
income tax deduction of approximately $25,000. (The amount
will depend upon their ages, the useful life of the house,
and other factors.)
Gifts of Life Insurance
A gift of life insurance can provide a significant
charitable deduction. Consider purchasing a new policy or
donating a policy that you is owned but no longer needed. To
receive a deduction, designate the College as both owner and
beneficiary of the life insurance policy. Check with your
insurance agent for the details. A donor can designate the
Harford Community College Foundation, Inc. as the
beneficiary of a life insurance policy to benefit the
College. The gift of life insurance may be in the form of a
new policy, or an existing policy that is paid in full.
Example: Mr. Jones owns a $100,000 life insurance policy
with a current cash value of $34,582. By transferring the
policy to the HCCF as the new owner and beneficiary, Mr.
Jones is able to receive a current charitable deduction in
the amount of $34, 582. If Mr. Jones decides to continue
paying the premiums on the policy after the gift is made;
these additional premium payments will be tax deductible
each year.
Life Income Gifts
Stock, which is paying low dividends, perhaps 2 - 3%, may
be considered as a "life income" gift. Transfer
the stock to the Foundation and establish a "charitable
remainder unitrust" or "charitable remainder
annuity trust" that would provide the donor with 5% or
greater annual return. This income would be paid to the
donor and/or a loved one for life, after which the assets
would be distributed outright to the HCCF. Through such an
agreement, the donor is simultaneously increasing income as
well as making a meaningful (and tax deductible)
contribution.
Example: Mrs. Jones, age 70, purchased some stock many years
ago for $10,000 and now that stock is worth $100,000. She
receives only $2,000 per year in dividends, or a 2% yield.
By transferring the stock to a charitable remainder trust
and specifying that she wanted a 6% return for life she
could:
- Triple her annual income (from $2,000 to $6,000);
- Avoid the capital gains tax she would otherwise incur
on the sale of the stock; and
- Be entitled to a charitable deduction of approximately
$55,000. (The amount of the deduction depends on the age
of the donor, the rate of return specified in the trust,
the size of the gift and other factors.)
Charitable Lead Trusts
Charitable lead trusts are essentially the reverse of the
life income gifts described above. The income from the trust
is first paid to the Foundation; the charity's interest
leads the way (hence the name of the trust).
Under this arrangement, assets are transferred to a trustee
who makes payments to the HCCF for a specified number of
years, after which the assets are transferred to the donor's
heirs. The charitable lead trust allows the donor to pass
assets to the children and grandchildren completely free or
substantially free of all estate and gift taxes. Charitable
lead trusts can be a strong consideration for anyone in the
50% estate and gift tax bracket.
Assets that generate an income or that are likely to
appreciate substantially can be put to good use as the
principal of a charitable lead trust. A lead trust transfers
the income from these assets to the Foundation for a
designated period of time (typically 10-20 years or more).
At the end of that time, the assets are returned to the
donor, his or her heirs, or any other persons designated. In
this manner, donors can direct a sizeable amount of annual
income to the Foundation while guaranteeing that heirs will
ultimately benefit from the asset.
Charitable Remainder Trusts
Under a charitable remainder trust, the donor receives
certain tax benefits and a return on the trust assets. After
the donor's lifetime, the remainder of the trust comes to
the Foundation for purposes that the donor has designated.
Bequests
The Harford Community College Foundation, Inc. can be
named as a beneficiary in your will in any one of a number
of simple ways. An outright gift, either a designated dollar
amount or percentage of your estate, could be specified. The
Harford Community College Foundation, Inc. could also be
named as a remainder beneficiary to receive funds only after
specific sums have been paid to individual beneficiaries. It
may be helpful to know that the donor can easily add the
Foundation to a will through an amendment called a codicil;
thus the entire will does not have to be redrafted.
Bequest through a will may be for a specific dollar
amount, a percentage of the total estate, or the residuum
remaining after all debts, taxes, expenses and other
bequests have been paid. Specific bequests of property may
also be made art objects, rare books, equipment or real
estate. A particular purpose may be designated, but the
functions and needs of the College do change in time, so the
unrestricted bequest is especially appreciated. It will be
applied where the need is greatest in that uncertain year
when it becomes effective.
Bequests of $2,500 + without any restrictions are used to
create an unrestricted endowment fund within the Foundation.
Earnings are used to fund most immediate needs of the
Foundation and the College. Bequests that are less than this
amount become a part of the existing unrestricted endowment
fund within the Foundation.
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