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Gifts of Cash The advantage of cash gifts is that your actual out-of-pocket cost is less than the dollar amount of the gift because of the allowable income tax deduction. You can deduct up to 50 percent of your adjusted gross income in the year you make a contribution. Any excess contributions above this percentage may be deducted over a five-year period.
Actual savings from the tax deduction on your gift will vary due to your tax rate and other factors. Generally, the higher your tax rate, the greater your savings.
Gifts of Property Your gifts of non-cash property such as securities or real estate may provide an ideal way for you to make a contribution. These gifts may be more advantageous than outright cash gifts because you can make a larger gift at less cost. Examples of these are as follows:
1. Property That Has Increased in Value Property that has increased in value and has been held long enough to qualify as long-term property may be beneficial to give. This type of gift entitles you to two benefits: first, you avoid paying capital gains tax; and second, in most cases you receive a deduction for the full value of the gift.
2. Property That Has Decreased in Value If you have property that has decreased in value at the time you are ready to make your gift, you should consider selling that property first and then contributing the proceeds to the JCJC Foundation. This allows you to receive the deduction for both the capital loss and the charitable gift.