What's the best asset to give? This decision can have a significant impact on the tax consequences of your gift and how the gift fits in with your overall financial plan.
Sometimes, the choice is relatively easy. Gifts to the annual fund are made with cash or publicly traded stocks. Life income gifts are also normally funded with cash, stocks, or other assets that are readily converted to cash.
Some assets that may not have occurred to you in connection with a significant gift to Carnegie Museums of Pittsburgh include:
- Retirement Plan Assets -- When assets remaining in a non-Roth IRA or qualified retirement plan at the death of the holder are distributed to individual plan beneficiaries, they are subject to income tax in addition to estate and inheritance taxes. Other assets, like cash or stocks, pass to heirs free of income tax. For this reason, retirement plan assets make excellent estate gifts to Carnegie Museums.
- U.S. Savings Bonds – Like retirement plan assets, U.S. savings bonds passing to individual beneficiaries at the death of the holder are subject to income tax in addition to estate tax. For this reason, if you are making estate gifts to Carnegie Museums and to individuals other than your spouse, it’s always best to leave bonds to Carnegie Museums and the other assets to the individual. Because we are tax-exempt, we will receive the full value of the bonds, and the amount going to your individual heir will be reduced only by estate taxes, not also by income tax on the income earned by the bonds over the years.
- Life insurance - Naming Carnegie Museums as the beneficiary of a paid-up policy that is no longer needed for its original purpose is an easy way to make a significant contribution to the museums. Giving the policy itself to Carnegie Museums rather than just naming us as a beneficiary removes the policy from your estate, thus avoiding federal estate tax on the cash value of the policy. It also gives you an income tax deduction in the amount of the surrender value of the policy at the time of the gift. The beneficiary or ownership of a life insurance policy must be changed through the company that issued the policy.
- Corporate charitable giving programs – If you qualify for participation in a corporate charitable giving program for key employees or board members, consider designating Carnegie Museums as a beneficiary.
- Real estate -- A second home or other real estate may be given to Carnegie Museums either outright or by bequest. If you want Carnegie Museums to have your home after your death, but wish to live in it until then, and would like an immediate income tax deduction for the value of the interest going to Carnegie Museums, a gift of a remainder interest in the property may accomplish your goals.
These are only some suggestions. We’d be happy to work with you to fashion a gift that meets your needs while providing long-term support for the museums. For more information, please call 412.622.1995, email email@example.com, or complete the on-line response form.