Gifts You Can Make Today
Easy to give – Just send a check or make a credit card donation on-line. Cash gifts to NLF entitles the donor to an income tax deduction and are always appreciated.
You can make a cash gift on-line by clicking on this link or mailing a check to: NAPABA Law Foundation, P.O. Box 65081 Washington, DC 20035.
Publicly Traded Appreciated Securities
Gifts of appreciated stocks, mutual funds and bonds that are publicly traded are the most common type of noncash gift you can make to NLF. Generally, your gift of appreciated, publicly traded securities held for at least one year to NLF allows you to claim a charitable deduction for the fair market value of the securities without having to pay any capital gains tax on their appreciation.
Although NLF will accept gifts of depreciated, publicly traded securities, in most cases, you will achieve more economic benefit by first selling the depreciated security and using the cash proceeds to make your gift to NLF.
If you have not held a publicly-traded security for at least a year, then your deduction for a gift of that security to NLF will be limited to the lower of its fair market value or your basis in it (generally, what you paid for the security). Your gift to NLF of such short-term gain property will be limited to 50% of your contribution base (your adjusted gross income). You will not recognize gain or loss on the gift.
In order for you to receive a charitable deduction in a given calendar year, your gift of a security to NLF must be delivered to NLF’s account by the end of that year. For administrative reasons, you should allow a minimum of two weeks and preferably a month for your investment adviser to complete delivery of your gift to NLF.
Life Insurance Policies
You can give your cash-value life insurance policies (e.g., whole life, universal and variable life policies) to NLF. You would then be entitled to a deduction equal to the lesser of your basis in the policy (e.g., total premiums paid) or its fair market value (which takes account of the policy’s current cash surrender value, cost of purchasing a comparable policy, and the insurer’s actuarially calculated reserve). To determine the precise value of an insurance policy and to support a charitable tax deduction for a gift of it to NLF, it is a good idea to obtain a qualified appraisal of the policy.
Individual Retirement Accounts (IRAs)
If you are age of 70-1/2 or older, you can give NLF up to $100,000 from your IRA without adverse tax consequences. Under the required minimum distribution rules, if a retiree fails to withdraw a certain minimum amount from his or her IRA (or other retirement plan assets) by the end of a calendar year, the IRS will assess a 50% excise tax on the amount not distributed as required. Generally, to contribute IRA (and other retirement plan) assets to NLF, you must first receive the money from the IRA (or plan) as taxable income, as part of or in addition to your required minimum distribution amount. The donation of the funds received would then be deductible, subject to the 50% of adjusted gross income limit mentioned above. However, under the circumstances set forth in IRC § 408(d)(8), if you have attained age 70-1/2, you may direct the custodian or trustee of your IRA to make direct distributions of up to $100,000 from your IRA to NLF in a given calendar year without having to report the distributed amount as taxable income. The amount distributed to NLF (up to $100,000) counts toward your required minimum distribution amount but cannot be claimed as a charitable income tax deduction.