Our Federal Income Tax laws allow a deduction for gifts to qualified charitable organizations such as churches, colleges, hospitals, charitable foundations, etc. The actual amount of the deduction is dependent upon several factors.

A. The Type of Charity: Does the organization benefit the general public, or does it have more limited or private purpose?

B. The Type of Asset: Is the donated item in cash, a capital asset with untaxed appreciation, tangible personal property, ect.?

C. The Portion Given: Is it a gift of the entire asset or only an interest in the asset, like a remainder interest, which will pass to the charity at sometime in the future?

D. Time The Gift Is Given: Is the gift being made now, or will it occur at some future dat, as under the terms of a will or trust?

The key factors in arriving at the amount of the federal income tax deduction are : (1) How long the charity must wait before it benefits, (2) How much income is paid to the beneficiaries each year, and (3) prevailing interest rates, as prescribed by law.

Income Tax Savings

This document was last modified on July 26, 1999

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