The Planned Giving department of the National Infantry Foundation works with you and your advisors — such as your attorney, CPA, broker, trust officer, life underwriter, or financial planner — in arriving at the best way for you to make a gift to the National Infantry Foundation.
As part of this planning process, your current financial plan, retirement plan, and estate plan may all be considered in arriving at the most effective gifting solution. Such planned giving approaches may include a bequest in your will, creation of charitable remainder or lead trusts, and gifts of life insurance or retirement plan proceeds. All types of assets owned by the donor can comprise these gifts to also include cash, stocks, bonds, mutual funds, real estate, or tangible personal property such as automobiles.
Follow Me Corps
The Follow Me Corps is our planned giving society created to provide special recognition for the dedication and generosity of our planned giving donors. Its name comes from the combination of the words “Follow Me,” a signature term used by the Infantry, and “Corps” defined as “a group of persons associated by some common tie.” Follow Me is also the name given to the iconic statute of the Infantryman located in front of and representing the National Infantry Museum. While not necessarily all inclusive, planned gifts to the National Infantry Foundation may be accomplished by a bequest under the donor’s will, donor created charitable remainder or lead trusts, and donor gifts of life insurance or retirement plan proceeds.
For more information, please contact:
(706) 685-5800 | email@example.com
The National Infantry Foundation, Inc. was formed for the sole purpose of raising funds for and operating the National Infantry Museum and Soldier Center. The Foundation’s past and future success in serving this purpose has depended and will continue to depend in large part on gifts from generous supporters like you. The following is a list of your available options for gifts to the Foundation along with selected examples. Examples contained herein are for illustration purposes only and in no way constitute tax, legal or investment advice. We strongly urge you to consult with your attorney, financial and/or tax advisor before making what you consider to be a significant gift or donation. We will gladly work with your independent advisors to assist in any way.
The easiest way you can give to the Foundation is by cash, usually in the form of a check. If you itemize your tax returns, your charitable gifts to the Foundation are deductible up to a maximum of 50% of your Adjusted Gross Income (AGI). If filing joint tax returns, use your aggregate AGI. Gifts of more than 50% of your AGI usually can be carried forward and may reduce your tax burden for up to five additional years. You may also want to determine if your employer has a matching gift program, and if they want to participate, please send us their matching gift form with your check.
Mr. Smith’s Adjusted Gross Income is $50,000 this year, and he gifts $35,000 to the Foundation. He may claim a charitable deduction of $25,000 on his tax return this year and deduct the remaining $10,000 next year.
Your stock portfolio is often among the most valuable assets you own. If you have owned stock for more than a year and it appreciated while you owned it, you will probably owe a capital gains tax when the stock is sold. Sometimes giving appreciated stock can be more beneficial to you than giving cash. Through Planned Giving in support of the Foundation, you may find that you not only don’t owe any tax on the increased value of the stock, but that you can also get a deduction for the full value of the stock at the time it is given to the Foundation. In any one year, a deduction for a gift of securities is limited to 30% of AGI with a five-year carry-over provision for future tax years. Example Mrs. Jones has $90,000 AGI this year. She gifts $50,000 in long-term (held for over one year) stock for which she paid $10,000 to the Foundation. She may deduct $27,000 (30% of AGI) on her income tax return this year as a charitable deduction, and carry forward the remaining $23,000 in deductions to next year. She avoids the capital gains tax on the $40,000 in gain on the stock ($50,000-$10,000) which she would have otherwise had to recognize if she had sold the stock herself.
Your stock portfolio is often among the most valuable assets you own. If you have owned stock for more than a year and it appreciated while you owned it, you will probably owe a capital gains tax when the stock is sold. Sometimes giving appreciated stock can be more beneficial to you than giving cash. Through Planned Giving in support of the Foundation, you may find that you not only don’t owe any tax on the increased value of the stock, but that you can also get a deduction for the full value of the stock at the time it is given to the Foundation. In any one year, a deduction for a gift of securities is limited to 30% of AGI with a five-year carry-over provision for future tax years.
Mrs. Jones has $90,000 AGI this year. She gifts $50,000 in long-term (held for over one year) stock for which she paid $10,000 to the Foundation. She may deduct $27,000 (30% of AGI) on her income tax return this year as a charitable deduction, and carry forward the remaining $23,000 in deductions to next year. She avoids the capital gains tax on the $40,000 in gain on the stock ($50,000-$10,000) which she would have otherwise had to recognize if she had sold the stock herself.
Real estate you own such as your residence, vacant lots, farm acreage, vacation homes, etc., may have greatly appreciated over the years you have owned them. You may find that the burdens of property ownership are now greater than the benefits derived from continuing to hold the real estate, and you don’t need or want that property any longer. Often, we hear of homeowners who wish to downsize and perhaps move into a condominium development where maintenance and security is provided. Also, your family or loved ones may no longer wish to take on the responsibility and cost of owning the real estate after your lifetime. You may be concerned about capital gains tax that will have to be recognized upon sale of the property due to the appreciation of the property’s value.
Similar to the above example given for gifts of stock, your gift of real estate to the Foundation can result in a charitable income tax deduction for the fair market value (independently assessed) and an avoidance of the capital gains tax on sale of the property.
The Foundation encourages gifts of paid-up or new insurance policies. By designating the Foundation as owner and beneficiary of a life insurance policy, you could benefit from a significant charitable deduction on your income tax return. In your planning, you may determine an existing older policy has served its purpose and is no longer needed, or you may consider gifting a new policy. You may wish to check with your employer to determine if your insurance program with them allows for designation of a charity such as the Foundation as beneficiary of the insurance proceeds.
Retirement accounts can be a major financial resource for you, and rather than paying a large portion of them to taxes after your (and your spouse’s) lifetimes, you may want to consider gifting some portion or all of them to the Foundation. Such accounts are subject to income taxes when received by your beneficiaries, therefore, retirement accounts make ideal gifts to charities like the Foundation. To leave the balance of a retirement account to the Foundation, you would make the plan administrator aware of your wish and sign the necessary forms to accomplish the gift. Retirement planning is a complex area, and therefore we recommend you contact your advisors who are able to provide guidance regarding gifts from your retirement plans.
Mr. Thomas has total financial holdings of $750,000 and of this amount he wants to leave his nephew, Bill, $250,000, and leave the remaining $500,000 to the Foundation. As part of his assets, Mr. Thomas owns a $250,000 IRA. If the IRA is left to his nephew, Bill will have to pay income taxes on those funds at his marginal rate of 35 percent. To avoid having him pay these heavy taxes, and end up with significantly less than $250,000, Mr. Thomas names the Foundation, which is a tax-exempt organization, as beneficiary of the IRA, and leaves Bill other less tax-burdened assets.
With a retained life estate, you deed a personal residence, farm or other real estate to the Foundation now, but you retain the right to occupy the property for life and continue to pay real estate taxes, maintenance expense and insurance on the property. Additionally, you can later decide to rent your home, or other real estate comprising the life estate, or make improvements to it. After your lifetime and the lifetimes of your spouse or others you choose to retain rights to live in the home or use the property, the life estate terminates and possession of the property passes to the Foundation. Based on your age and the value of the property, you receive a sizable income tax deduction in the year the gift is made. This deduction can be up to 30% of your adjusted gross income and any unused deduction can be carried over for five additional years. If the gift is appropriately structured, capital gains and estate taxes can also be avoided.
Mr. and Mrs. Gray make a lifetime gift to the Foundation of their personal residence and adjoining land. They retain the right to live on the property for the remainder of their joint lives. This gift allows them a charitable income tax deduction in the year of their gift, and the value of their home and land has been removed from their estate for tax purposes. The income tax deduction is based on the fair market value of their home minus the present value of the life estate they have retained.
In this trust arrangement, you transfer ownership of an asset (cash, stock, real estate, etc.) to the trust. The trust may provide either a fixed payment (annuity) or fixed percentage (unitrust) of the trust assets determined each year to the Foundation for a period of years (usually 15 to 20). At the end of that period of years, the trust assets are given back to you or to other beneficiaries you have named in the trust document. Typically, the lead trust is used with assets with a potential for continued high appreciation. The trust permits the trust assets to be transferred to your other family members in the future with a low transfer tax cost. Thus, potentially, you can leave a significantly larger inheritance to your heirs than you could if you had left them the same assets by will or other trusts.
Mr. Phillips places $1,000,000 in a Charitable Lead Annuity Trust. The trust distributes income to the Foundation for 20 years at an annuity rate of 6% providing the Foundation a fixed sum of $60,000 annually for a total of $1,200,000 over the 20 years the trust is in existence. The trust is structured so that Mr. Phillips receives a charitable gift tax deduction of $918,842 based on the value of the 20 year income stream promised to the Foundation. When the trust terminates in 20 years, the value of the trust based on the $1,000,000 initially transferred plus any growth or less any loss of value will be transferred to Mr. Phillips or his heirs based on provisions in the trust. If it is assumed the net earnings rate within the trust is 7% annually, his heirs will receive an inheritance of $1,409,955 at termination of the trust. (In making the above calculations, it was assumed the transfer to the trust occurred June 27, 2011, and the June 2011 Internal Revenue Code Section 7520 discount rate of 2.8% was used to calculate the charitable deduction.)
Tangible personal property can consist of items such as art, antiques, coin or stamp collections, precious stones and rare books to include equipment or other items which can be utilized by the Foundation in its operation. You must have held such gifted items for over a year. Two main types of tangible personal property are: 1) items having a related-use to the Foundation’s purpose, and 2) items not related to the Foundation’s purpose. Gifts of related-use items allow you a deduction on your income tax return of the appraised value of the gift on the date of the gift, but limited to 30% of your AGI in the year of the gift with a five-year carry forward. Gifts of non-related-use items limit your deduction to the item’s cost. Gifts of tangible personal property are evaluated prior to acceptance by the Foundation’s Gift Acceptance Committee to determine if it is related-use property.
Transfers of property such as securities or real estate to the Foundation for less than the full fair market value are called bargain sales. Such a transaction consists of a sale portion and a gift portion. Usually, the Foundation will pay you an amount equal to your cost basis in the asset, and in doing so, you are able to recover your original investment. Any growth in value of the property transferred is considered a gift for which you receive a tax deduction. Taxes will be owed by you only on the part of the gain relating to the bargain sale.
A primary way to support the work of the Foundation is by naming it as beneficiary in your will. You can designate an outright gift of a certain dollar amount, or you can specify a percentage of your estate be left by will to the Foundation. If you have a taxable estate, the estate should receive an estate tax charitable deduction for the full value of the bequest to the Foundation. Since you are not making a gift until after your lifetime, you can change your bequest at any time. We recommend you ensure that your family is aware of and understands your desires regarding your bequest to the Foundation at the time of the writing of your will or codicil.
Example of Bequest Language
“I give, devise and bequeath to the National Infantry Foundation, Inc. of Columbus, Georgia, all (or state a dollar amount, or a percentage) of the rest, residue, and remainder of my estate both real and personal, to be used for its general support (or for the support of a specific program).”
This is a trust in which you place appreciated assets (stock, land, etc.) in trust for the Foundation. The trust returns an income to you for life, or for a set period of years (not more than 20). For a Charitable Remainder Unitrust, the annual, semi-annual, or quarterly payment of income to you (or designated beneficiary) is based on a percentage (not less than 5%) of the trust assets as they are valued annually. For a Charitable Remainder Annuity Trust, the annual payment to you or the designated beneficiary is fixed at a percentage (not less than 5%) of the fair market value of the transferred assets at the time of the creation of the trust and is not revalued each year as with a Unitrust. Upon your death, or death of the designated beneficiary, the principal of the trust is transferred to the Foundation.
Mrs. Brown, a 75-year-old donor, places assets valued at $250,000 in a Charitable Remainder Unitrust (CRUT). The trust can be structured to return an income to her for life, or for a set period of years (not more than 20 years). Assume she elects to receive annual payments from the trust of 5% (payments received each year must be at least 5% of the amount originally placed in the trust) of $250,000 or $12,500 in the first year of the trust’s existence. Thereafter, her income will fluctuate up or down based on the trust’s annual value. The $250,000 gift to the trust results in an immediate charitable income tax deduction on her income tax return of $150,708 in the year of funding the trust. Any excess deduction can be carried forward on her tax returns for five years. When the trust terminates after the period of years established in the trust, or after Mrs. Brown’s lifetime, the amount placed in the trust (initially $250,000), plus earnings, less payments made to Mrs. Brown will be transferred to the Foundation. (The above charitable income tax deduction was determined by use of Internal Revenue Code Section 7520.)
While your gifts to the Foundation for its current needs are greatly appreciated, we also encourage you to consider gifting to the Foundation’s Endowment Fund created primarily to address the Foundation’s future needs.
You can create trusts under your will to provide income and/or principal for beneficiaries you name in the trust to include the naming of the Foundation as a beneficiary.