A gift of an appreciated asset to the Frederik Meijer Gardens & Sculpture Foundation can serve as an attractive savings to the donor. If assets have been owned for more than 12 months and appreciated in value, they generally result in long-term capital gains tax. When transferred as a gift, these long-term appreciated assets (1) give the donor a charitable income tax deduction for the full market value of the asset and (2) avoid the capital gains tax that would have occurred if the donor had sold the asset.
A Foundation supporter has a strong interest in education and the benefits of gardening for individuals of all ages. The donor gives $100,000 in appreciated stocks that have been held for a long time and which have a cost basis of $10,000.
|Federal income tax savings ($100,000 x 25%*)||- $25,000|
|Federal capital gains tax avoidance ($100,000 - 10,000) x 15%||- $13,500|
|MI income tax avoidance ($100,000 - 10,000) x 4.35%||- $3,915|
|Estimated net cost to the donor||$57,585|
Benefit to the Foundation
The $100,000 donation could be used to create an endowment fund with the earnings financing educational programs, including the benefits of gardening, for children and adults at the Frederik Meijer Gardens & Sculpture Park.
* Individual federal income tax rates vary.