Okoboji Foundation Professional Advisors Forum 10.14.14
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Transcript of Okoboji Foundation Professional Advisors Forum 10.14.14
Live…Give…Better Together.
Community Foundation
of Greater Des Moines
Wade A. Den Hartog, Director of Affiliates & Charitable Partners
Joe Sorenson, Manager of Affiliate Relations
Presentation Outline
Endow Iowa and IRA Rollover Updates
Fund Illustrations
Gift Illustrations
Keep Iowa Growing
Endow Iowa and IRA Rollover
Endow Iowa
An Incredible Incentive for Donors
Must be held at a qualified community foundation
Iowa charitable causes
No more than 5% annual spending/granting policy
Endow Iowa
Then donors can be eligible for
• 25% tax credit for contribution – in addition to federal deduction (can carry forward for up to 5 years)
• Limit each year, per taxpayer and also statewide $300,000 per taxpayer
• Tax credit paperwork submitted; awarded on a first come-first served basis
As of 10/8/2014, $2,744,370 Endow Iowa tax credits remain
Endow Iowa
With Endow Iowa, donations to Community
Foundation endowments cost donors less.
$10,000
Less tax benefits:
Net federal tax savings -3,960
Endow Iowa Tax Credit -2,500
Net Cost of Gift $3,540
Note: Use appreciated assets subject to capital gains and the savings are even better!
Disclaimer: Information provided is general and educational in nature. It is not intended to be, and should not be construed as, legal or tax advice. The Community Foundation does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation.
Charitable IRA Rollover
It MIGHT be back?!
• For Individuals 701/2 and older
• Can transfer up to $100K of IRA assets directly to
charity
• No charitable deduction but the money is not
realized as income for tax purposes
• Iowa Taxpayers can qualify for Endow Iowa tax
credits!
Fund and Gift Illustrations
1. Donor Advised Fund
2. Legacy Fund
DONOR ADVISED FUNDS
Donor Advised
Fund
LEGACY FUNDS
1. Contribution made through planned gift(will /testamentary instrument)
2. Deduct assets from estate for purposes of estate tax
3. Administration (agreement easily modified)
4. Investment
Legacy Fund
5. Favorite Charities(one or several)
Family Foundation Fund
Community Foundation’s Better Together Fund
The Johnsons
A GIFT OF APPRECIATED SECURITIES
• Ted and Marlene own 1,000
shares of stock
• They originally paid $10 per
share or $10,000 more than 11
years ago
• The fair market value today is
$37 per share or $37,000
• If they sell the stock, they’ll have
$27,000 in long-term capital
gain income
• If they are in the 20% LTGC
tax bracket, their bill equals
$27,000x.20=$5,400
• Their net amount after
selling the shares will be
$31,600
The Johnsons
CONTINUED
• If they instead give the stock to
charity, they bypass all $5,400
of capital gains tax
• Plus, they can deduct the fair
market value of their stock
$37,000 (up to 30% of their
adjusted gross income)
• In addition they get 25%
state tax credit
• They have a 5-year carry
forward, too
Keep Iowa GrowingIowa’s Farmland Giving Program
…for the love of the land
Why?Farmland is by far Iowa’s most valuable asset:
Total number of farms 88,631 Total amount of farmland 30.6 million acresAverage farm size 345 acresAverage dollar value per acre $8,716Aggregate value of Iowa farmland
is estimated at $267 billion
Why?
The Community Foundation’s 30 affiliated county community foundations, together with Polk County, hold a combined 9.5 million acres of farmland.
If Keep Iowa Growing captured only 1% of this farmland, the value of assets held for charitable causes would be an estimated $866 million.
Why Now?
Less Debt. Iowa farmland without debt:
1982 – 62%
2012 – 78%
Average age of farmland owners
56% of Iowa farmland is owned by people over age 65
30% of Iowa farmland is owned by people over age 75
Compared to 12% in 1982
Lack of succession planning and estate planning
Why Now?
Protect Iowa’s Wealth
The projected transfer of wealth in Iowa through 2049 is $198 billion
Promote Charitable Giving
During one of the largest transfers of wealth in history, the Community Foundation must be proactive and innovative to provide options to channel this wealth to charitable causes.
Why the Community Foundation of Greater Des Moines?We are uniquely positioned to offer benefits not available from other charitable resources: Maximum tax benefits
Endow Iowa tax credits An affiliate relationship in 30 counties throughout Iowa We are the “nonprofit’s nonprofit” Expert staff and Board to manage & market the program Offering donors flexibility and control in designing their
legacy
How It Works
Keep Iowa Growing provides a vehicle to keep land an Iowa asset, keep land functional as farmland and provide a lasting legacy to the community and Iowa.
Landowners Can…
Make a gift of farmland in which the revenue benefits the charity of their choice immediately.
Be flexible in making a gift of farmland but retaining a life estate and an income stream for their lifetime.
Suggest a tenant farmer.Establish a variety of fund types, such as a Donor
Advised Fund, Family Foundation Fund, Designated Fund, Field of Interest Fund, Better Together Endowment, or their County Community Foundation Endowment.
What types of Gifts will be accepted through Keep Iowa Growing?
Outright gifts of farmland made during life
Bequests
Retained life interest
For term of years
For term of life donor
For term of life of donor and spouse (“last-to-die”)
Outright Gift
Land stays in production
Retained Life Interest
Upon death of donor Land stays in production
Questions?