Planned Giving Want a way to support your community’s teachers and students? Charitable giving to the MISD Education Foundation is a great way to help Mansfield ISD retain excellent teacher and develop well-educated students. What if something happens to you? Would you want to leave anything to any charitable organization? The Mansfield ISD Education Foundation could be your charity of choice. Gift planning can help you make charitable gifts from your estate while receiving financial benefits for yourself. You can do this either through a charitable remainder trust, charitable lead trust, or gift annuity. There are rules to follow, so consult your tax advisor. You can donate a tax-deductible gift of money or appreciated stock directly to the Foundation and receive a charitable deduction off your personal income tax return for the year of the donation, if you itemize your deductions. If you donate appreciated stock instead of just money, you get to write off the fair market value of the stock, and the charity just sells the stock with very low cost basis, and you would like to make a donation anyway, then you save the capital gains taxes you would have to pay if the stock was just sold and the money was just donated instead. Charitable remainder trusts are the most popular charitable trust vehicle. You can provide current income for yourself (or someone else) and fulfill charitable objectives at the same time. In exchange for making irrevocable donations to the trust, you receive partial, immediate tax deductions but can still earn taxable income from the donated assets during your lifetime (or a period not to exceed 20 years). After this occurs, the property’s ownership transfers to the charity, which is the Mansfield ISD Education Foundation. The tax-deductible portion is the present value of the charitable remainder interest when the trust is created. Typically, a minimum contribution of $100,000 is required to generate an  income stream and tax deduction large enough to justify the cost of creating and maintaining a charitable remainder trust. Note that because you, the donor, retain an interest in the assets, only part of the value of the  donations is deductible from taxable income. A charitable lead trust is also available, and it enables you, the donor, to help the Foundation for a certain period of time (as you determine), after which the asset reverts back to you as the donor, or to your estate. An Income tax deduction is allowed for the donation of an income interest into the trust, when the interest is in the form of either a guaranteed annuity interest or a unitrust interest, and you are treated as the owner of the interest. This is a great option when you have a large amount of income in one year but expect less income in future years, as in the year the trust is created, a charitable deduction is generated. A donor advised fund is another way to donate. After you contribute your donation to the fund, the proceeds are invested in a pool of specified investments such as mutual funds. You then become the account’s advisor and you qualify for a charitable tax deduction on your personal tax return for the amount of this donation. You no longer own the account’s assets but you can recommend specific grants or donations that can be made from these funds. Once approved, your grant money is sent to the charity or charities of your choice, in this case the Mansfield ISD Education Foundation, with a letter specifying the grant’s purpose. If the designated charity is a donor-advised fund, your heirs can continue to participate in your legacy. A gift annuity is still another way you can transfer money or property to the Foundation and, in return, receive an annuity for life, all without using a trust. This way a fixed stream of income is ensured for the period of the annuity, while allowing the charitable donation for the excess of the value of the property transferred to the Foundation over the fair market value of the annuity at the time of the donation. All these ideas can limit income and estate tax exposure, while helping you reach your philanthropic giving goals. The Mansfield ISD Education Foundation is a great way to give back while helping children of all ages enjoy innovative teaching ideas that go beyond the normal classroom experience. For questions, please contact Karen Freeman at taxtips2@charter.net or call (817) 473-8471.