Featured Articles
PG Calc publishes monthly articles on the latest topics in planned giving.
Gift Date - When It Is and Why It Matters
-There are different factors that determine when a gift has been completed. But why does it matter, since in most cases it’s just the matter of a few days? That day can make a difference at any point in the year, by changing what discount rate is used for calculating the deduction or in determining the amount of a pro-rated first gift annuity payment. However, it is particularly significant– to many of your donors – at year-end, as it affects when they can take their charitable deduction. A day late, a gift made on January 1st rather than December 31st, and the deduction is “lost” for a year.
How to Evaluate the Health of Your Gift Annuity Program
-Everyone needs to go to the doctor for a checkup now and again. The same can be said for a gift annuity program. Without the benefit of routine assessments, some programs will encounter problems or fail when an early diagnosis could have saved them.
Limitations on Income Tax Charitable Deductions – Simple and Complex Aspects
-The income tax charitable deduction reduces a taxpayer’s reportable income. It does not reduce the income tax due on a dollar-for-dollar basis. For example, consider a taxpayer with a marginal income tax rate of 24%. If the taxpayer makes a charitable gift of $10,000 that is fully deductible, the income tax savings is not $10,000. Instead, the donor’s reportable income is reduced by $10,000, with tax savings in this case being 24% of $10,000, or $2,400.
Collecting IRA Beneficiary Gifts – A Death Defying Experience
-PG Calc’s March Featured Article discussed the practical challenges of making a charity the beneficiary of an IRA and other qualified plans upon the donor’s death. The process of completing the beneficiary designation form is complicated and bureaucratic. And then there's the matter of collecting the proceeds after the donor's death.
Grantor Charitable Lead Trusts: Why They (Sometimes) Make Sense
-Most gift planning professionals have heard of charitable lead trusts (CLTs), where the charitable beneficiary receives payments, typically for a term of years, and the remainder is distributed to one or more non-charitable beneficiaries at the end of the term. Historically, these trusts have been used – or at least contemplated – by donors whose wealth exposes them potentially to paying gift or estate tax. This type of lead trust is called a non-grantor charitable lead trust. At the end of the term, the assets remaining in the trust are distributed to persons other than the donor (grantor), and most typically, to members of the donor’s family.
Hey, What's Up?
-I’ll tell you what’s up. The IRS discount rate, the interest rate used in computing the deduction for gift annuities, charitable remainder trusts, retained life estates, and charitable lead trusts. It’s edged upward a full percent in the last 6 months, and it appears likely to continue that trend for the rest of 2018 as the Federal Reserve continues to gradually raise interest rates.
The Practical Aspects of Accepting Beneficiary Designation Gifts
-Charities market beneficiary designations of 401(k)s, IRAs and other qualified plans as an easy, low-cost way to make a tax-wise planned gift. This is true for the most part. The details of completing a beneficiary designation can be more challenging than they appear, however. There are pitfalls and potential mistakes that can result in a failed beneficiary designation and no gift to charity.
Is There Life in Life Income Gifts?
-The new tax law, which went into effect January 1st, has prompted a lot of discussion about the impact it will have on charitable giving. Of course, there’s no way to fully predict how donors will react to the changes in deductions (standard and itemized) and reduced tax brackets. But somewhat lost in the conversation has been the wide variety of other benefits that lead donors to make a charitable gift in a particular way.
Tax Reform and Its Impact on Planned Giving
-On December 22, 2017, the President signed into law an “Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.” That’s quite a mouthful, so this article will refer to the law as the “Tax Reform Act” for convenience. There has been some alarm in the charitable community about the impact of this law on charitable giving. The intention of the analysis that follows is twofold. First, it explains which laws affecting planned giving have changed and which laws remain intact. Second, it offers five suggestions on the best ways donors can continue to make tax-efficient planned gifts.
Top Ten Most Frequently Asked Client Questions for 2017
-PG Calc's Jeffrey Frye and his colleagues in our Client Services department have reviewed all the product support calls we received this year and have culled out the ten top calls for 2017. These calls cover a broad spectrum of topics and questions, the answers to which will be of great interest to users of PG Calc's products. We will follow this article with a posting of the top 10 planned giving questions for the year, so keep an eye out for that article in a future eRate.