When to Give Appreciated Property:
Even if cash is readily available to make a gift, marketable property — either securities (stocks, bonds, mutual funds) or real estate — should first be reviewed. If an asset (1) has been held for more than one year, (2) is significantly appreciated in value, and (3) will otherwise be sold, a gift of the property itself is likely to be more advantageous than writing a check for cash.

If you are hesitant about donating a particular stock that you favor, you can purchase a like number of replacement shares. This will increase the cost basis in the investment to current market value, thus reducing any gains tax payable at the time of a subsequent sale should further growth occur.

Receive a Two-fold Tax Savings:
Making a gift to the School Sisters of Notre Dame of highly appreciated property provides you with a two-fold tax savings; an immediate income tax deduction in the year of the gift, and total elimination of the capital gains tax.

The income tax deduction is based on the current value of the security, not the original cost which is often much lower. Dividends received are often low, usually between 2% and 3%. This means that in addition to making an efficient gift-one that costs far less than the value donated-you are not sacrificing much income to make the gift.

What You Should Know:

• The full fair market value of the property, if owned for at least one year and a day, is deductible in the year of the gift.
• If the gift, coupled with other gifts, exceeds 30% of your adjusted gross income (the maximum deduction allowable for most gifts of appreciated property), the excess may be deducted over as many as five subsequent tax years.
• No matter how much the property has appreciat- ed in value, you pay no capital gains.
• A qualified appraisal is required for assets, other than publicly traded securities, over $5,000.
• You can give appreciated real estate and receive the same tax advantages.

Methods for Giving Securities:
u If your brokerage firm holds a security for your account, instruct your broker to electronically transfer the securities. This is often the simplest and most convenient way to make your gift.

When making a gift of appreciated securities, you should not direct your broker to sell the securities and distribute the cash proceeds to School Sisters of Notre Dame. This will trigger capital gains tax for you. On the other hand, if the securities have declined in value, you should direct your broker to sell the depreciated securi- ties in your account and then distribute the cash proceeds to School Sisters of Notre Dame. This will enable you to obtain a capital loss for tax purposes.

• If you have possession of stock certificates, send the unendorsed certificate and a signed stock power (available from your broker) to us in sepa- rate envelopes. Sign the blank stock power with- out filling in our name. This permits us to sell the stock without having to go through the trans- fer process. The gift is complete on the date of postmark of the later envelope. Include a cover letter describing your gift and its purpose.

• When giving mutual funds, bonds, notes, or mortgages, specific advice of your tax advisor should be obtained. Additional time should be allowed for completion of the gift transaction.

• When making a gift of securities, it is best to call us first, so we can help you with the details.

Plan Your Gift:
While no one can predict the future, you may wish to receive more information about actions you can take today that can leave you in a better position, regardless of fluctuating markets and/or changes in tax policies. Tremendous benefits can result from taking the time to plan the form of your gifts.

A gift of appreciated property is but one of the many ways you can combine your charitable giving goals with effective estate and financial planning. Ask us about other ways to use appreciated property, e.g., funding a trust or gift annuity that will provide you with lifetime income.

For More Information Call, Write, or Email:

School Sisters of Notre Dame
Planned Giving Office
13105 Watertown Plank Road
Elm Grove, WI 53122-2291
Phone: (262) 787-1034 Fax: (262) 207-0050
Email: ssndpg@ssnd-milw.org

This is not intended as legal advice; for that, consult your attorney or tax advisor.