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Strategies Can Cut Estate Taxes

Homewood philanthropists are using planned giving strategies within their estate plans to:

  • Enhance their deduction portfolio

  • Decrease taxable income

  • Increase tax free income

  • Reduce or eliminate capital gain taxes

  • Benefit Heirs

  • Make an impact on the Homewood family 

Here are examples of planned giving strategies:

IRA RMD Gifting  – the Path Act of 2015 made this gift vehicle permanent. 

  • Donors age 70 ½ or better can make a direct gift of up to $100,000 from your IRA to Homewood.

  • Donors will pay no income tax on the amount gifted.

  • Homewood can be made beneficiary of an IRA, thereby eliminating both estate taxes and income taxes at the time a donor passes away.

Use this letter to make your IRA gift to Homewood.

Stay tuned for updates on the Legacy IRA Act currently being discussed in congress. This bill would allow for up to $400,000 to be gifted and fund an income-producing gift vehicle. 

 Charitable Gift Annuity (CGA) – A CGA is an agreement whereby a donor makes a gift to Homewood Foundation and Homewood Foundation agrees to pay the donor an income for life. 

  • Rates as high as 9.5 percent

  • No maximum gift amount

  • Income continues uninterrupted for 1 or 2 lives (does not go through probate should a spouse pass away)

  • Significant portion of the income is tax free

  • Receive an immediate charitable deduction

  • Can be funded using cash, stock and/or real estate

  • Reduce capital gain taxes when using appreciated assets

Charitable Remainder Trust (CRT) – A CRT allows for donors to disperse income for beneficiaries for a specific period of time and then donate the remainder of the trust to Homewood.

  • Provide for multiple beneficiaries

  • Receive an immediate charitable deduction

  • Eliminate capital gains when using appreciated assets to fund

  • Donate the remainder to multiple charities

Retained Life Estate – With this gift vehicle a donor can transfer ownership of a property to Homewood while retaining the right to enjoy the property during their lifetime. 

  • Receive an immediate charitable deduction

  • Retain the use of the property for life

  • In some cases the remainder interest in the property can fund an income producing gift vehicle

 Helpful 2017 Tax Cuts and Jobs Information 

  • The charitable deduction for cash gifts increases to 60 percent of adjusted gross income (AGI)

  • The charitable deduction for appreciated assets is 30% of AGI.

  • Charitable deductions are able to be carried over for up to five years.

  • 529 Accounts (college savings accounts) have been expanded for use for K-12 and Homeschooling education purposes.

  • State and Local Tax (SALT) deduction is capped at $10,000 

  • Standard Deduction = $12,000 for single filers and $24,000 for married joint filers.

  • Death Tax has increased from $5.6 million to more than $11 million.