Open Letter: With the Right Team, You Can Do So Much More

Dear friends,

Giving is emotional. Working with legal counsel and tax advisors, donors can find the most tax-efficient solution for satisfying their charitable goals to support the mission of the Texas Health Resources Foundation. An outright gift of appreciated marketable securities can avoid capital gains tax to the donor. If the gift is large enough to allow a donor to itemize, it can be a double tax benefit with a charitable deduction on the current fair market value of the asset. For maximum tax efficiency, shares of marketable securities must be held for more than one year.

Although a noncash charitable gift may appear to be complicated, a skilled financial planner will know how to guide donors in establishing such gift transfers. Nonmarketable gifts ranging from transferring ownership of life insurance policies, real estate, mineral interests as well as closely held investment interests can transform a donor’s giving strategies during lifetime.

The transfer will be deemed completed when the gift is delivered and there has been a change in control. The valuation of gifted assets is generally based on the fair market value which is the price at which the property would change hands between a willing buyer and a willing seller. The IRS requires a qualified appraisal for donated property over $5,000 in value with the exception of cash or publicly traded securities. In-kind gifts of nonmarketable assets can be a great source of funding an organization’s mission while potentially providing a donor with a charitable deduction.

Additionally, donors can make a significant impact by designating the Texas Health Resources Foundation as a beneficiary of a life insurance policy, an IRA account or a qualified retirement plan.

Katrina M. Pipasts, CSPG
Northern Trust
Foundation & Institutional Advisors