Creative Giving Opportunities

Cash is one of the world's scarcest and most valuable commodities. While gifts of cash are possible for some donors, some find it difficult to free up any significant amounts.

Stocks, Bonds and Mutual Funds provide great giving potential. These gifts allow the ministry to sell the stock, receive fair market value and not pay any capital gains tax. The donor receives an income tax deduction for the full fair market value of the shares, and does not pay any capital gains tax. The donor may then repurchase the same securities. This results in a stepped-up basis in a new asset for the donor.

Personal Property gifts can be a simple method of helping the ministry. We are constantly in need of items such as computers and other types of equipment. In many cases, donors may give fully depreciated property (the deduction value is limited to the donor's depreciated basis) while the ministry has available the full appraised value of the asset.

Grain and Livestock gifts eliminate the self-employment tax for some donors. A commodity gift made directly to the ministry has a value of approximately 20 percent more than a cash gift resulting from the donor's sale and the cost of taxes on the same commodity

Real Estate gifts made directly to the ministry may either be rented, sold, or traded for other properties.

Bargain Sales are gifts of appreciated assets (usually stocks or real estate) to the ministry and from which the donor seeks only to recover the cost of the initial investment. Any capital gain tax liability for the donor is limited only to the proceeds from the sale, the balance is an outright charitable gift with no associated capital gains tax liability.

Stock Bailouts offer the owners of closely-held corporations to make a gift of highly-appreciated stock to the ministry and then allow the corporation to repurchase that stock with retained earnings. Donors enjoy the benefits of a current income tax deduction and the transaction may also draw out some of the retained earnings in the corporation. The ministry would then receive the cash from the proceeds while the shares of stock are simply retired and remain treasury shares. If a donor has transferred part of the corporation's ownership to other members of the family, this gift of shares of stock results in a higher proportion of ownership by other family members because there are fewer shares outstanding.

Gift with Wealth Replacement enables a donor to make a substantial gift of appreciated stock or real estate to the ministry. In most cases, it will be possible for the donor to utilize the tax savings from such a gift by applying them to a life insurance policy. The life insurance proceeds ultimately replace the gifted assets for the donor's family.

These represent but a few of the many creative giving options available to benefit the donor, the donor's family and the ministry as well. We will be happy to provide any information that may be helpful in planning a gift to Briarwood Lutheran Ministries that will be beneficial for all parties.