Our Mission is to help God's people accept the challenge and experience the blessing of Biblical Stewardship.

Our Vision is to see local churches accomplish the ministry God has called them to fulfill through the stewardship of God's people.

Our Passion is to see all of God's people attending all our Wesleyan churches bringing the whole tithe into the storehouse.

• Overview
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• Ways to Give
• Christian Will

Every year, many choose to contribute time, energy, and other resources in support of their charitable interests. Generous tax incentives provided under federal law and the laws of many states can also help you make the most of your charitable dollars.

The following information given below will help ensure that your gifts have the greatest possible impact:

• Giving the right property.What you choose to give can be vitally important in determining how much to give.
• Giving at the right time. Charitable gifts are made in the context of other events in our lives. Through careful planning, it can be possible to make gifts that accomplish chariable objectives while helping to provide for others needs such as retirement security, educational expenses, care for elders, and other financial priorities. Tax benefits can also be enhanced by carefully timing your gifts.
• Giving in the right way. Whether you give money or other property outright, or you defer your gift and retain income and/or access to property for your lifetime, special opportunities may allow you to give more than you might have otherwise thought possible.

Read on for ideas that can help you make gifts, continue to provide for your financial security, and meet other important goals. More a full brochure on this information, please contact us at 800-627-2537 or StewardshipMinistries@wesleyan.org.

1. Giving Cash

Cash, usually in the form of a check, is most commonly used to make charitable gifts. In recent years, more and more donors are choosing to make cash gifts through various means of electronic transfer as well.

When you itemize your deductions, cash donations can allow you to eliminate tax on up to 50% of your adjusted gross income (AGI) each year. Any amounts not deductible in the year of your gift can be "carried over" to bring you savings in as many as five future tax years.

Your actual savings depend on your tax bracket and other factors. As a general rule, the higher your tax bracket, the greater your tax savings.

Your charitable deductions can reduce both your regular or alternative minimum income tax liability for 2009.

Some individuals who do not always have enough deductions to itemize them may discover extra tax savings by timing deductions so they can itemize in some years.

Shifting, or "bunching," payment of taxes, charitable gifts, or other appropriate deductions may be helpful in this regard.

If you have recently sold securities or other investments, you may want to consider using a portion of the cash proceeds to make additional gifts this year.

Be sure to keep acknowledgments and other records of your gifts to ensure you can use your deductions. This is especially important for gifts of $250 or more.

2. Giving Securities

If you own stocks, mutual funds, or other securities that have increased in value since you have owned them, you may want to consider using them to make your charitable gifts this year.

Gifts of stocks, mutual funds, and certain other securities that yield little income can result in maximum tax savings with little or no effect on your household income.

When you give securities that have increased in value that you have owned for longer than one year, you are entitled to an income tax charitable deduction for their full value, not just their original cost. Addition ally, you do not have to pay the capital gains tax that would be due if you had sold the property.

In effect, you are allowed to use the "paper profits" in the investment to further your charitable goals while enjoying an exemption from tax on the gain.

Gifts of appreciated securities may be deducted each year in amounts up to 30% of your AGI. As in the case of cash gifts, you can use any excess deductions in as many as five future tax years.

Giving securities can conserve cash for other purposes and can be used as part of a strategy to periodically rebalance your investment portfolio in a tax-efficient way.

(If you have securities you would like to give to your local Wesleyan church and your church doesn't have an agreement with a broker to exchange these securities, contact us to process the gift through our The General Treasurer's Office of The Wesleyan Church.)

Giving a security while "keeping" it

Suppose you were reluctant to give a security worth more than you paid for it because you think it may further increase in value.

Is there a way to make a charitable gift of such an asset while still "keeping" it? Yes. Instead of making a gift in the form of cash, it may be best to give the security itself, take advantage of the ability to deduct its full value, and completely bypass tax on the increase in value that has occurred up to the time of the gift.

You may then use the cash you would have otherwise given to repurchase the same security at today's price. You would then have the same amount invested in the security as before, but with a new, higher cost basis.

If the security were to later grow in value and you were to sell it, you would only owe tax on the increase from the point at which you repurchased it.

In the event the value of the investment should decline after your repurchase, you would have a capital loss that may serve to reduce your income tax in the year the stock was sold, rather than simply less gain.

When securities have decreased in value

If the value of securities you would like to give is less than the original cost, it is usually best to sell the property and make a charitable gift of the cash proceeds. You may then be able to claim tax benefits for both the capital loss and the charitable gift, effectively deducting more than the pre-sale value of the security.

3. Giving Real Estate

The benefits of giving real estate can be similar to those described for gifts of securities.

If you own a home or other property you no longer wish to live in or manage, and you would like to make a charitable gift, you may find that a gift of such property can be an efficient way to meet both goals.

When you sell real estate that has increased significantly in value since you purchased it, you may be faced with a sizable capital gains tax, especially if the property is not your principal residence.

In many cases, if you give real estate that has increased in value, you will be able to deduct the full value of the property-not just its original purchase price.

In addition, you will not be liable for capital gains tax on the transfer because the property was donated rather than sold.

If real estate has decreased in value since you have owned it, it may be best to sell it, realize any tax benefits that a deductible loss may provide, and make your charitable gifts from cash proceeds.

When considering making a charitable gift of real estate, it is very important to choose property that meets a number of criteria.

The real estate should be in good condition and readily marketable, and for tax benefit purposes the property's independently appraised value must equal the amount of the anticipated gift. In most cases, federal regulations require a special appraisal of donated property other than cash or marketable securities for which a deduction of more than $5,000 is claimed.

If a property is mortgaged, you may still be eligible for tax and other benefits, but special attention should be paid to the manner in which the property is given.

Gifts of real estate can also reduce your other expenses associated with the property, including taxes, insurance, maintenance, etc.

4. Giving Other Assets

Works of art, jewelry, antiques, and other personal property may also make practical and meaningful gifts. Special rules apply to the tax benefits when donating such items. Whether your gift is deductible and the amount of your deduction can depend on the appraised value of the property and how the gift will be used. A qualified appraisal is required to substantiate the value of non-cash gifts other than marketable securities and certain other assets when their value is greater than $5,000.

Life insurance policies that are no longer needed may also be used to make special gifts. If you will owe less in estate taxes, or if loved ones no longer need the protection, consider making a charitable gift of the policy's accumulated value.

Tax benefits can be available for gifts of life insurance policies, depending on the cur rent cash value of a policy and other factors.

If you are required to withdraw funds from qualified retirement accounts or may do so without penalties for early withdrawal, you may find that using withdrawal amounts to make charitable gifts can be an excellent way to minimize, or even eliminate, taxes on the withdrawals while removing what may be heavily taxed assets from your estate.

Recently proposed changes in the law may add to the appeal of making gifts from retirement plan accounts. Check with your advisors for the most current information.

5. Making Future Gifts

As part of your long-range financial planning, you may also want to consider gifts that will be received only after you and your loved ones no longer need the assets.

Through 2009, you can leave up to $3.5 million to loved ones free of federal estate taxes. In many cases, this can make it possible to include charitable gifts as part of your estate plan, while your heirs receive the same or more than they would have under prior law.

There are a number of ways to accomplish this:

Giving through your will, for example, can be a convenient way to leave a lasting legacy. After providing for your loved ones, you may decide to make charitable gifts of a specific amount, a percentage of your estate, or all or part of what remains after family and/or friends have been remembered.

Such a gift can often be arranged with the simple addition of a codicil (amendment) to your existing will.

Giving through living trusts is another idea you may wish to consider. A growing number of people are using trusts created during their lifetime (often referred to as "living trusts") to provide for the man agreement and future distribution of their assets while reducing the cost of probate. Charitable gifts can be a practical addition to these trusts. A simple amendment to a living trust can be all that is required to make a gift in this way.

Giving life insurance proceeds as part of your future plans can allow you to make a meaningful future gift. You may name a charitable beneficiary to receive all or a portion of policy proceeds at death. Income and estate tax benefits may result from such gifts.

Giving retirement plan remainders is gaining in popularity because amounts remaining in Individual Retirement Accounts (IRAs) and other tax -favored retirement plans at death may be subject to both estate and income taxes before ultimately being received by heirs. For this reason, charitable gifts of retirement plan balances may be wise from both income and estate tax planning perspectives.

In consultation with your advisors, you may find that one or more of these options may help you meet long-term charitable goals while first providing for the needs of your loved ones.

6. Give and Retain Income

Did you know you can make gifts today, enjoy immediate tax and other financial benefits, and retain fixed or variable payments for the remainder of your life or another period of time you choose?

Through the use of a number of special gift planning tools provided by Congress to help Americans give more effectively, you can make significant gifts while providing for retirement, caring for older loved ones, or arranging for funds to meet educational expenses.

Such plans typically feature income tax benefits for the year in which the gift is completed. They can also offer a way for you to convert low-yielding assets to a source of additional spendable income without incurring capital gains tax at the time of the gift.

You may be able to structure your gift in such a way that a large percentage of the income payments you receive are tax-free or taxed at lower rates than other income.

Because the assets used to fund these types of gifts will ultimately be used for charitable purposes, they are also generally not subject to gift or estate taxes. This may result in substantial savings in addition to the income and capital gains tax benefits de scribed above.

Through the use of a variety of special purpose gift vehicles, your assets can provide increased income while you enjoy the satisfaction of knowing you are also making a meaningful charitable gift.

Check with us or your advisors if you are interested in exploring the possibility of giving in this way.

7. Make a Temporary Gift

It is also possible to set aside assets in various ways that provide for charitable gifts for a period of time you choose before they are ultimately returned to you and/or your heirs.

Ways exist that can be used to make gifts over time while you also reduce or eliminate gift and estate taxes that might otherwise be due on assets when they are eventually transferred to loved ones.

If you wish to delay an inheritance for younger loved ones while also funding charitable gifts, these options may be a satisfying addition to your plans.

Completing your plans

More information is available regarding the ideas mentioned in these pages, including the summary of charitable tax benefits on the page that follows. You may wish to share this information with your advisors as a starting point in discussing ideas you believe may be applicable to your situation. As always, your gifts are greatly appreciated and will be used wisely.

General summary of tax considerations for charitable giving:

• Gifts of cash
• Deductible up to 50% of adjusted gross income for itemizers.
• The higher your tax rate, the more dollars you generally save from the charitable deduction.
• Gifts of appreciated property
• Generally deductible for full fair market value up to 30% of adjusted gross income for itemizers.
• Capital gains tax is avoided when long-term property is given.
• Special rules apply to gifts of real estate.

• Gifts of tangible personal property (art, jewelry, etc.)

• If property is "related" to charity's objectives, same deduction as for appreciated property (above).
• If "unrelated," deduction is limited to the lesser of cost basis in the property or full market value.
• Carryover provision

• If more than the deductible limit is given in one year, excess deductions may be claimed over the next five tax years, as long as you continue to itemize.
• Estate tax deduction for gifts
• Unlimited deduction for cash or other property given to a qualified charity at death.

See IRS publications 526,561, and 1771 for helpful information about substantiating your gifts, appraisal requirements for larger gifts of property other than marketable securities, and other matters. Your advisors can help you determine how various provisions may apply to you.

The purpose of this publication is to provide general gift, estate, and financial planning information. It is not intended as legal, accounting, or other professional advice. For as sistance in planning charitable gifts with tax and other financial implications, the services of appropriate advisors should be obtained. Consult an attorney for advice if your plans require revision of a will Of other legal document. Tax deductions vary based on applicable federal discount rates, which can change on a monthly basis. Some opportunities may not be available in all states. ©MMVIII RFSCO, Inc. All Rights Reserved.

 

Phone: 800-627-2537

Email: stewardshipministries@wesleyan.org

Mailing: P.O. Box 50434, Indianapolis, IN 46250

© 2009 The Wesleyan Church