As we just described, you potentially eliminate the capital Cuba Email List gains tax you would incur if you sold the assets yourself and then donated the proceeds, but you could also claim a fair market value charitable deduction for the tax year in which the gift is made and choose to pass on that savings in the form of more giving. MICHAEL: So, Vonny, one of the things Cuba Email List that Julia mentioned in her earlier response was private foundations, which is another type of endowment giving vehicle. Can you briefly explain how these work and when a donor might choose to use a private foundation as their giving vehicle? VONNY: Sure. We’re seeing a move toward the preference for more control over charitable giving, which can be achieved through the use of a private Cuba Email List foundation. And what it is, is a legal entity that’s set up solely for charitable purposes.

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It differs from a public charity, in that it relies on funding from Cuba Email List a single individual, a family, or even a corporation, while public charities rely more on public funding to support their activities. Private foundations are tax-exempt, nonprofit organizations, and they’ve got to pay out 5% of their endowment each year in the form of grants or other administrative expenses, Cuba Email List such as salaries of staff. The IRS will require them to file an annual form, and it’s made publicly available, and it describes the foundation’s grants, investments, and expenses. From the Cuba Email List donor’s perspective, you can claim a tax induction when you transfer assets to a private foundation and it will have a board of directors, typically of three or more people.

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And in a private foundation, staff can be paid for management Cuba Email List and also administrative work. You can set the foundation up to exist across multiple generations, or you can set up the foundations such that all the assets are spent within a lifetime or over some set period of time. The tax benefits of contributing to a private foundation depend on the asset. And, generally speaking, donors who itemize their deductions get to deduct up to 30% of their adjusted Cuba Email List gross income for cash contributions and 20% for appreciated securities, both of which have a five-year carry forward. So, generally, for publicly-traded assets, the valuation of deduction Cuba Email List will be the fair market value. For appreciated assets that are held privately, the valuation will be limited to cost basis. MICHAEL

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