HOW TO GIVE
Donations to Cabrillo are investments in the human potential of our students and the wider community we serve. Structuring gifts with tax consequences and income opportunities in mind, donors may be able to achieve some additional financial goals as well.
Outright gifts allow donors to see gifts at work during their lifetime. All outright gifts can result in income tax savings, and donors may realize multiple benefits by carefully structuring such gifts.Donors may give unrestricted funds or choose to target a gift to a particular program. Described below are gifts of Cash, Securities, Real Estate, Personal Property, Closely Held Stock, and Founders Stock.
The simplest way to give
If you wish to make a straightforward gift of cash, your gift is tax deductible in the year in which it is made. You can deduct an amount equal to 50% of your adjusted gross income. Amounts over 50% can be carried over for use during the next five years. Donate Now…
Enjoy double tax savings
Gifts of appreciated securities can provide substantial income tax savings. If you have held securities for more than a year, you are allowed to deduct the market value of the securities without paying tax on the appreciation, for an amount up to 30% of your adjusted gross income in the year you donate. Amounts over 30% can be used over the next five years. Remember, do not sell appreciated securities and then donate the proceeds. Transfer the stock to Cabrillo to make full use of the potential tax savings.
If you wish to donate stock that has fallen in value, you should sell the stock at a loss and donate the proceeds. The loss can be used to offset gains, and you can receive the normal charitable deduction for donating the proceeds.
Maximize the value of your property
A gift of real estate is often an excellent way to support Cabrillo. During the year that you transfer title to the Cabrillo College Foundation, you can take a charitable income tax deduction for up to 30% of your adjusted gross income. Amounts over 30% can be carried over for use during the next five years. To take advantage of potential tax deductions, it is important that you transfer title to appreciated real estate that you have held more than a year to the Cabrillo College Foundation rather than selling and donating the proceeds. You can then use the fair market value to establish your charitable deduction without being subject to capital gains tax on a sale.
Real estate gifts can offer many benefits to donors, but they can be complicated. We ask that you discuss your situation with us in advance of making your gift. Cabrillo financial advisors can evaluate your potential gift to decide if the gift can be accepted, with marketability an important factor, and can insure that you structure the gift to your advantage.
Cabrillo can benefit from your valuable possessions
Cabrillo can accept any type of asset as a charitable contribution, including personal property such as art, jewelry, and antiques. However, donors can deduct the fair market value of the gift only if it is related to Cabrillo's function as an educational institution. For example, if the gift of a rare book or manuscript can be used by the library, you can deduct the fair market value. For gifts that Cabrillo must sell to support its educational mission, donors can deduct only the cost basis. Call us to discuss the appraisal and classification of a donation of personal property. (The restriction regarding direct relationship to Cabrillo's educational mission does not apply to bequests, only to lifetime gifts. Your estate can deduct the fair market value of any bequest of personal property.)
A gift of life insurance that you no longer need is another way to fulfill your charitable goals. You can receive a current income tax charitable deduction when you assign ownership of a policy to the Cabrillo College Foundation and name the foundation as beneficiary of a life insurance policy. If the policy is not fully paid-up, you can take a deduction for the annual premiums.
Even if you wish to continue to hold your life insurance policy, you can still name the Cabrillo College Foundation as a beneficiary or a contingent beneficiary of the policy.
Closely Held Stock
Closely held stock typically is held by the owner of a corporation who has not received dividends on the stock. The owner can sometimes release retained earnings from the business through a charitable gift, without being taxed at both the corporate and personal level. This somewhat complicated transaction requires careful planning and attention to IRS statutes. Call us to discuss your individual situation.
An opportunity for entrepreneurs
A company donating founder's stock can claim a tax deduction at the beginning of its business venture, when such deductions can be especially helpful. If the business is successful, non-profits can often sell founder's stock to realize substantial gains. The donating company receives the tax deduction regardless of whether the business goes forward.