Tax Benefits

There are many ways for you to participate in planned giving in a way that also provides financial protection for you and your family.

You should consult with an attorney or accountant to discuss the type of plan best suited to your goals.

A Gift of Securities

This can be an attractive giving option for many, particularly if you have stock that has grown in value.

Tax Benefits of a Gift of Securities
You receive a double benefit from contributing long-term appreciated stock: a charitable income-tax deduction for your gift, and substantial savings by avoiding paying capital-gain tax on the paper gain. As long as you have held the stock for more than 12 months, you can deduct its full fair-market value at the time of your gift, regardless of how much you paid for it; note, however, that your total charitable deduction is normally limited to 30% of your adjusted gross income.

If you plan to give stock, bonds or mutual funds, which have grown in value, the first rule is DO NOT SELL YOUR SECURITIES to make a contribution. Transfer the securities directly to USDF. For example, if you contribute directly to the National Endowment $25,000 worth of shares that you purchased for $5,000, you realize the following benefits:

  1. You will be able to deduct $25,000 from your income for the year in which the gift is made. If you are in a 31% tax bracket, you will save $7,750 in federal income tax for that year.
  2. You will not be required to pay the capital gains tax of 20% on the $20,000 gain in the value of the shares. If you yourself sold the shares, you would ordinarily be required to pay $4,000 in capital gains tax.

However, if you have a stock that is worth quite a bit less than you paid for it, you should sell first and use the cash proceeds for your gift. If you sell, you can recognize the loss you incur on the sale to offset other capital gain and, in some cases, ordinary income.

A Bequest

You are encouraged to have a will properly prepared so that you, rather than the state, will determine the future of your resources. Please remember USDF in your will either by a specific bequest or by a residuary bequest.

A specific bequest contributes a specific amount of money, investments, personal or real property from your estate. For example: "I bequeath to the United States Dressage Federation the sum of $XXXX dollars to be used for the National Endowment."

A residuary bequest leaves the remainder or any percentage of an estate to the beneficiary once all specific bequests have been made. For example: "I bequeath all the rest, residue, and remainder of my estate to the United States Dressage Federation for the National Endowment."

Tax Benefits of Planned Giving Tax Benefits of a Bequest
As noted above, you will determine the future of your estate. There may be estate tax deductions if you make provision for charitable bequests.

Some Other Examples of Planned Giving

  • Beneficiary Designation on an IRA
  • Beneficiary Designation on an Insurance Policy
  • Charitable Lead Trust
  • Gift Annuity Agreement
  • Charitable Remainder Trust
  • Revocable Living Trust
  • Life Estate Agreement

Please consult your tax advisor as to what is the best plan for you.