Giving

 

Heritage Society Newsletter Spring 2003

Inside this issue:

Thomas N. Wilson, Jr. plans for future of family and alma mater

Tom Konkoly finds meaning in providing for mother, BW and retirement

Tax Code Rewards Heads of Household

New Heritage Society Members and New Endowments

What Do I Say? 

Let Your Giving Blossom

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BW Alum Fashions His Own "Tax-Cut" Plan

Late last year, Thomas N. Wilson, Jr. '52, decided to sell a piece of commercial real estate he owned in Florida.  The property was attractive, buyers were available, and so a sale at a good price was likely.  But a potentially large capital gains tax bill was a major concern.

Tom, a Baldwin Wallace trustee, sought a way to help his TWilson.jpgalma mater while lowering his taxes.  Working with his attorney, his accountant and BW development staff, a "tax-wise" solution was found - prior to sale, transferring the property to a charitable remainder trust (CRT).

A CRT is a device that offers donors the opportunity to receive income, obtain tax benefits and create a future gift to charity.  In Tom's case, the CRT document was drafted and his Florida property was retitled in the name of the Thomas N. Wilson, Jr. Charitable Remainder Unitrust.  The trust sold the property shortly thereafter.

The result?  There was no immediate capital gains tax due upon the sale.  Instead, Tom received an income tax deduction for part of the property's value, his family receives annual income for 20 years and Baldwin Wallace University will receive the trust's value at the end of the term.

"My BW charitable trust is great," says Tom.  "I was able to sell highly appreciated real estate, increase my income, decrease my tax liability and advance the mission of Baldwin Wallace University."

Many alumni and friends of BW have discovered the benefits of creating a charitable remainder unitrust.  Also, recent tax rulings have given CRTs increased flexibility, making them even more attractive.  If you would like to find out how a CRT could fit into your "tax-planning," please contact Mike Walczak, mwalczak@bw.edu or Tom Konkoly tkonkoly@bw.edu or call (440) 826-2131.

 

Two Ideas That Could Be Ideal for You, Too - Tom Konkoly, a gift planning professional, walks the talk

I did it for Mom

Recently, when considering a way to provide extra income for my mother to augment her Social Security and pension income, I decided on a BW gift annuity.  I'll admit that it was thinking "outside the box"- usually the donor is the income beneficiary of most life-income gifts to charitable organizatioTomandMom.jpgns.

At the time of the gift, Mom, age 84, was eligible for a 9.4% gift annuity rate.  My goal was to increase her income by $500 a year.  A gift of $6,000 provided Mom the income I had envisioned.  A generous portion of the gift payments flow to Mom as tax-free income.  I received a current year income tax deduction for the residual gift value to Baldwin Wallace University.  It's a great set of benefits and would be of value to anyone who wants to make their parents' retirement more comfortable.

And a charitable retirement plan for me

During the last BW capital campaign, I turned 50.  It seemed time to express my values in a tangible way, while augmenting my retirement income plan.  A BW deferred gift annuity fit the bill for me.  Actually, I made a combination gift that included outright gifts to BW for immediate campaign purposes and a deferred gift annuity that begins payments to me at the traditional retirement age of 65.

Because the payments to me won't begin for 15 years (during which BW can invest the money tax free), I will receive a higher percentage payment compared to an immediate gift annuity. 

For more information about how these ideas might work for you, please call me at (440) 826-3460 or (800) 755-7534.  Thank you. 

 

Illustration for Deferred Payment Life-Income Gift Annuity

Person, age 50 * Gift Amount: $10,000 * Charitable deduction in year of gift:  $2,853.60

Payments begin at 65, 15-year deferral prior to payment start date.

Annual payment at 65, based on $10,000 gift amount = $1,340, $359 of which

is tax-free for 20 years.

Additional gifts for a deferred gift annuity may be made, providing a way to structure a more significant life income stream for donors so motivated.

    

Sample One-Life Gift Annuity Rates*  

    Sample Two-Life Gift Annuity Rates*

Age

Payout Rate    

Ages

Payout Rate

65

6.3%

65 & 65

5.8%

70

6.7%

70 & 70

6.1%

75

7.3%

75 & 75

6.5%

80

8.3%

80 & 80

7.1%

85

9.7%

85 & 85

8.1%

90

11.5%

90 & 90

9.5%

*Based on immediate payments.

 

 


 

New Heritage Members and Endowments - Spring 2003

Anonymous (3)  *  Barthelman Family Scholarship
Clyde '53 and Gail Bartter  *  The Les Dingledine Baseball Fund
Mae Breitinger Ferguson '63  *  Carole L. Maatz '49
The Carole L. Maatz Conservatory Scholarship  *  Arthur J. Pelander '42
Charles Seith '35 and Dorothy Hummel Seith '35
Phyllis Buchholz Sigrist '54 and Robert Sigrist
John David Smith '71  *  R. Scott Thomas '82 and Donna Zapis Thomas '84 Scholarship
Evangelo Vagianos '65 and Karen Halbedel Vagianos '65

 


 

What Do I Say?

We often receive requests for sample bequest or trust language.  Here are examples to share with your attorney:

"I give to Baldwin Wallace University, 275 Eastland Road, Berea, Ohio 44017, [SUM]." OR
I give to Baldwin Wallace University, 275 Eastland Road, Berea, Ohio 44017, [SUM] to be used for..." "...a permanent named endowment fund." OR
"...a permanent named scholarship fund."
OR
 "...a named faculty chair."
  Other purposes may be established upon agreement and documentation with the officers of Baldwin Wallace University. 

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  Tax Code Rewards Heads of Household*

Some unmarried taxpayers may be missing an opportunity to save taxes.  They may qualify as heads of households for IRS purposes, which offers additional exemptions and deductions.  The tax law defines a head of household as: 

  • A person who is not married or a surviving spouse (a widow or widower with dependents who does not remarry can use the joint return tax rates for two years following the death of a spouse) at year's end.
  • Someone who maintains a home for more than half the tax year that is the principal home of a dependent child, grandchild or stepchild.
  • A taxpayer who maintains a separate principal residence (including a home for elderly) for a parent who is a dependent.

Not only does head of household status mean a larger standard deduction than that for single taxpyers ($7,000 versus $4,750 in 2003), but tax rates are more favorable.  For example, a taxpayer with taxable income of $75,000 would pay income tax of $16,818 at single taxpayers' rates, compared with $15,183 as a head of household.

Make sure your tax preparer know if you're providing a home for any qualified dependents that would permit you to file as head of household.

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Let Your Giving Blossom*

A bit of fragrance always clings to the hand that gives roses - Chinese proverb

     If you were to ask 100 people to explain why they contribute to Baldwin Wallace University, you might get 100 answers - most of which could be distilled into five words:  It makes me feel good!

     Our donors are men and women whose lives have been touched over the years by their association with BW.  They cherish our mission of committing to the liberal arts and sciences as a foundation for lifelong learning and delight in the idea of preserving our work for future generations.  They often are people who have found success in business or a career and now find it appropriate to give something back, to perpetuate something meaningful.

     The "joy of giving" can be experienced at many levels and satisfied through a variety of gift plans.  You might consider leaving a legacy with a gift through your will or revocable living trust.  You also can provide assistance from your estate without necessarily changing your will.  Life insurance, IRAs and other retirement accounts and even bank deposits and CDs can be paid at death to BW, through simple beneficiary designations.  Or you might consider an important bequest that reserves lifetime income for a friend or family member, then benefits Baldwin Wallace.

     We would be pleased to discuss with you the many ways you can contribute to Baldwin Wallace.  Just call our Development Office at (440) 826-2136 or (800) 755-7534.

 


*Articles reprinted with permission from R & R Newkirk, Willow Springs, IL.

 

 

 

 

 

 

 

 

 

 

 

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