Current or Outright Gifts
This is the most common type of gift given to AU. The gift is made in the current year and funds are available to AU for immediate or current use. They may be referred to as "current gifts" or "immediate gifts" or "outright gifts".These gifts may be used to for any number of purposes. The most popular uses are for student financial aid or general fund use. You may benefit a specific department, or building project. When you name a specific purpose or place to receive the benefit of your gift, we call that a "restricted" gift.
| Benefit to AU: | The funds you give are available for immediate use by the university. |
| Benefit to the Donor: | The donor has an opportunity to see the gift used during his/her lifetime. |
| Tax Implications: | They are tax deductible. |
| Examples: |
Tax Implications:
Careful planning will ensure your gifts of cash are fully deductible up to 50% of your adjusted gross income (AGI). If the gift is large enough to exceed 50% of your AGI in the year of the gift, the remaining amount of the gift may be carried over and used as a deduction for up to 50% of your AGI until the gift amount is exhausted or up to five years, whichever comes first. The gift amount is removed from your estate.Publicly traded securities or stock
Gifts of appreciated stocks or bonds have the same positive benefit to Anderson University as a gift of cash —, however, a gift of securities is usually more beneficial to you, the donor, than a gift of cash.Tax Implications:
With a gift of marketable securities which have been held longer than one year, you receive a charitable deduction of the full fair market value (FMV) of the securities. The FMV is determined by the average of the high and low sales prices of the stocks on the gift date. You may apply the gift as a deduction up to 30% of your adjusted gross income (AGI) in the case of securities, with the same five-year carry-over provision – and avoid gift and estate taxation, as with gifts of cash. In addition, you avoid paying any taxes on capital gains on the appreciation in the value of the of the securities.Closely held stock (i.e. not publicly traded, such as a family-owned business)
A gift of closely held stock will provide the donor with a charitable deduction for the full fair-market value of the stock. The donor will also avoid tax on any appreciation in the value of the stock.After the gift is made, the donor could re-purchase the stock from the university for cash. This not only enables the donor to retain complete control over the company, but also makes cash available to the charity for its current needs. As long as the university is not obligated to sell the stock to the corporation, the transaction should produce no adverse tax results.
There are significant considerations to be weighed by both the university and the donor before such a gift is completed. Gifts of this type are carefully evaluated on a case by case basis by the university. Please call the Development Office at 1 (800) 421-1025 to discuss a gift of closely held stock.
Any gift of real estate can provide substantial support to Anderson University. The rules for gifts of real estate are essentially the same as for gifts of securities. Any real estate may be donated. If you have held appreciated real estate for more than one year, you receive a charitable deduction for the full fair market value (FMV) of the unencumbered real estate. You may apply the deduction up to 30% of your adjusted gross income (AGI) in the year of the gift with the five-year-carry-over provision. You avoid capital gains taxes on the appreciation you have in the property. There are no gift taxes, and you have removed the property from your estate, thereby reducing your estate taxes.
Almost any type of real estate may be contributed: rental property, undeveloped land, farms, commercial buildings, vacation homes, or your residence.
Potential gifts of real estate are evaluated by the Anderson University on a case-by-case basis before acceptance. The university must consider insurance, environmental, maintenance, property tax liability, and other potential risk factors, including special tax provisions which apply to certain types of real estate.
Note:
Special consideration may apply to real estate that has been depreciated for tax purposes or that is subject to debt. If you are considering such a gift please check with your advisors and contact us to discuss your situation. See our special pages about gifts of Real Estate.
In some cases a donor may want to recover a portion of the value of an asset. This can be accomplished by entering into a bargain sale transaction with the university. The donor sells the asset to the university for less than the fair market value, and gets an income tax deduction for the difference.The sale price is one that is mutually agreed upon by the donor and the university. The payments can even be spread out over a period of time to create a source of annual cash flow and spread out any taxable gain.
Tax Implications:
A bargain sale is considered part sale and part gift. Only the portion of the gain attributable to the "sale" portion is subject to capital gains taxes. You receive an income tax deduction for the full "gift" portion. Rules dictate what portion is considered gain. A Development Planned Gifts staff member or your advisor can help you understand these issues.Rare books, works of art, precious stones, gems and coin or stamp collections, etc. are considered tangible personal property. Gifts of tangible personal property may offer significant benefits.
There are two basic categories of gifts of tangible personal property:
- Items related to the university's purposes -"related use"
- Items not related to the university's purposes - "unrelated use"
The deduction in that case is limited to the lesser of fair market value or the donor's basis in the property.
If the fair market value (FMV) is less than your basis, a gift of "unrelated use" property may still be beneficial to you and Anderson University. Note: If you create an asset, such as a painting or sculpture, your deduction is limited to the cost of materials. We evaluate all tangible personal property gifts on a case by case basis to make sure they are right for you and Anderson University. If you have a question about such a gift, please call the Development Office at (800) 421-1025.
