You Can't Take It With You

Nearly everyone has at least one prized object, whether it's Grandfatherís rocking chair, a series of first-edition books or your mother’s wedding ring. There may come a time when you feel ready to pass these items on to a family member. Or perhaps you would consider donating them to a charitable organization such as your favorite charitable organizations. If so, the government has devised special rules and benefits for gifts of "tangible personal property" to qualified charitable organizations.

Tax Benefits
When you sell personal property you've held long-term (for more than 12 months), you pay up to 28 percent in capital gains tax on the profit from the sale. If you were to donate the item, however, you would avoid the capital gains tax.

A donation also qualifies you for a charitable income tax deduction. If the intended use is related to our tax-exempt purpose, you may deduct the full present fair market value. For an unrelated use, your deduction is limited to the property's cost basis (what you originally paid) or its current market value, whichever is less.

The "related use" rule applies only to income taxes. Regardless of how the property will be used by the charitable organization, your estate will benefit taxwise by removing the asset from your estate.

Methods of Giving
Once you've decided what you'd like to donate and to whom, you need to consider the following options. Will your gift be:

• Outright or contingent? A contingent bequest requires a certain event to occur before distribution. For example, you might bequeath a parcel of land to a relative provided he or she survives you; if not, the funds would go to the alternate you have named, such as your favorite charitable organizations.
• Restricted or unrestricted? When we receive a bequest without strings, charitable nonprofits can determine our most urgent requirement at the time. However, you may prefer to stipulate how your gift is to be used. If so, we would be happy to discuss this with you.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.



The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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