A variety of gifts to City of Hope can help reduce income, capital gains or estate taxes.
Here are the latest tax law updates that pertain to charitable giving and various tax-smart giving opportunities. Our experienced planned giving team is available to answer your questions and discuss personalized giving strategies.
Tax Law Updates
Required Minimum Distributions (RMD) for 2021:
- Required minimum distributions from retirement plans were suspended in 2020 but have been reinstated in 2021.
- For 2021, you must take an RMD from your IRA if you were 70 ½ or older on December 31, 2019, or if you were born at any time in 1949 or earlier (meaning you would be age 72 before December 31, 2020).
These CARES Act provisions have been modified and extended through 2021:
- Donors who do not itemize their deductions may still take a $300 charitable deduction ($600 for married couples filing jointly) for cash contributions made in 2021. This means taxpayers will be able to take the standard deduction AND deduct up to these limits when calculating their taxable income.
- In 2020 and 2021, for donors who itemize, cash donations can be deducted up to 100% of adjusted gross income.
- Cash gifts from corporations may continue to be deducted up to 25% of taxable income instead of reverting to the standard 10% limitation.
A Qualified Charitable Distribution from an IRA
City of Hope supporters, age 70 ½ or older, can get a tax break while supporting breakthrough treatments and research with a qualified charitable distribution (QCD) gift. With a qualified charitable distribution, you get many benefits.
- Make a qualified charitable distribution from your IRA to City of Hope and avoid paying income taxes on your donation.
- You can donate up to a total of $100,000 each year ($200,000 for married couples) and exclude the gift from your taxable income.*
- Advance lifesaving research and patient care.
*Complete your transfer before December 31. You should initiate your year-end transfer prior to December to ensure that the transfer is completed by December 31. Gifts made by IRA checkbook and received by City of Hope after December 16 may not arrive in time for the IRA custodian to count the gift as a distribution for the current year.Learn more and request information here.
Gifts From Your Donor Advised Fund
You may want to continue making an annual donation to City of Hope but may no longer be able to itemize and deduct your donations each year as a result of the tax change. You may choose to make a gift to a donor advised fund (DAF) in an amount greater than the standard deduction, allowing you to receive the tax advantages of giving in that year. You can then maintain your regular annual support to City of Hope through annual recommended grants from your DAF in subsequent years when you do not itemize.Learn more here.
A Gift Annuity Funded with Stock
If you have stocks that you have held for more than a year and have increased in value, you can use them to fund a City of Hope charitable gift annuity, and you will bypass a significant portion of the capital gains tax. The remaining gain will be apportioned over several years of your annuity payments rather than being taxed all at once. Plus, you will enjoy the other benefits of a gift annuity — eligibility for an immediate income tax deduction and a fixed annual payment for life — at an attractive payment rate.
Evelyn, age 82, establishes a $50,000 charitable gift annuity with stock that she originally purchased for $10,000. In addition to an annual payment of $3,500 for as long as she lives and an income tax charitable deduction, more than $20,000 of her capital gain on the stock’s appreciation will never be taxed.*
*Based on payment rates as of July 1, 2020. For illustration purposes only.
A Charitable Lead Trust
A charitable lead trust is a way of making a gift to City of Hope that enables you to reduce gift and estate taxes while controlling the timing of passing assets to your children and grandchildren.
You contribute securities or other appreciating assets to a charitable lead trust. The trust makes annual payments to City of Hope for a period of time. When the trust terminates, the remaining principal is paid to your heirs.
Benefits to You:
- The present value of the income payments to City of Hope reduces your gift/estate tax.
- All appreciation that takes place in the trust goes tax-free to your heirs.
- The amount and term of the payments to City of Hope can be set so as to reduce or even eliminate transfer taxes due when the principal reverts to your heirs.
- You have the satisfaction of making a significant gift to City of Hope now that reduces the taxes due on transfers to your heirs later.
A Charitable Remainder Trust
A charitable remainder unitrust with City of Hope can provide you and/or other beneficiaries with income for life or for a fixed number of years. For your donation, which can be appreciated securities or real estate, you receive an immediate income tax deduction for a portion of your contribution to the unitrust and savings on capital gains taxes, too. You will also have the satisfaction of making a significant gift that benefits you now and City of Hope later. With this type of gift you can:
- Avoid paying capital gains on sales of appreciated stock and real estate
- Convert the full value of stock into a lifetime income stream
- Receive a significant charitable income tax deduction
- Remove assets from your taxable estate
A Gift of Retirement Plan Assets
Because retirement plans are taxed differently than most assets, they may actually become a tax liability. Naming City of Hope a beneficiary of your retirement account can be an attractive option for leaving a legacy and reducing income and possibly estate taxes for your loved ones.
*Tax Rates shown here reflect 2018 tax law changes.
Estate tax is not shown because it applies infrequently.
Making City of Hope a beneficiary of a retirement account is easy. Simply ask your plan administrator for a beneficiary designation form and include City of Hope as beneficiary of a specific percentage of the account value or as a contingent beneficiary.
Gifts of Real Estate
An immediate gift of real estate. Donating property outright to City of Hope frees you from the costs and responsibilities of ownership. If you have owned the property more than a year, you will enjoy a charitable income tax deduction equal to the property’s full fair market value. You will eliminate any capital gain and the gift reduces your future taxable estate.
A gift of real estate in your will or trust. You can include a gift of real estate to City of Hope in your will or living trust and you will be eligible for a charitable estate tax deduction upon your passing.
A life income gift funded with real estate. Convert your real estate investment into a predictable income flow and realize capital gains and other tax benefits.
Gifts of Appreciated Securities
When you give appreciated securities, you may receive an immediate income tax charitable deduction as well as savings on capital gains taxes. Your gift of stock or mutual funds can also be used to generate income for life through a charitable gift annuity. You can make a gift of appreciated securities to City of Hope while diversifying your portfolio and/or securing a stream of income. For direct information about gifts of stock, please call 800-232-3314 or email us at
email@example.com. Click here for more information about establishing a charitable gift annuity with appreciated securities.