Gift of the Month: Charitable Bequest
Monday, August 25, 2008

 
A charitable bequest enables a person to support the Technion without depleting current financial resources, and it may also reduce estate taxes. By customizing their bequests, donors can have the added benefit of designating their support towards a project of their choice, or honoring or memorializing a loved one.
 

Bequest commitments can be made for a specific dollar amount, for one or more named assets, or for a percentage of the donor's estate. Charitable bequests are easy to understand and simple to add to a will. In fact, a charitable bequest provision in a will can be as short as one or two sentences.
 

Many charitable bequests provide for endowment gifts: these allow individuals to provide continuing support for the ATS and to positively affect the world-class academic and research activities at the Technion far beyond their lifetimes.
 

When donors indicate that the ATS is included in their estate plans, the ATS and the Technion benefit immediately because the Technion is better able to anticipate future cash flow. This disclosure also allows the ATS to recognize the donors during their lifetimes. We can also work with the donors and their families on appropriate designation of the bequests. In certain circumstances, Technion makes current funding available to match a donor's bequest; in such cases the donor has the satisfaction of seeing his/her project started. For example, for a bequest commitment of $1 million dedicated to graduate fellowships, the Technion will name a graduate fellow in the donor's honor. At the donor's passing, the bequest will be used to fund a permanent endowment to provide four graduate fellowships in perpetuity.
 

Since the beginning of its $1 billion "Shaping Israel's Future" campaign, the ATS has received nearly $250 million in bequest commitments and about $130 million in receipts from decedents' estates. These gifts represent about 80 percent of all the planned gifts that the ATS has received during the campaign so far.
 

We recognize that making a bequest is a serious decision. A donor who makes a bequest commitment to the ATS automatically becomes a member of the ATS Genesis Circle, our planned gift recognition society. Genesis Circle members are recognized as leaders in the ATS family.
 

If you have any questions or comments about making a charitable bequest or other issues related to planned gifts, please contact me at mark@ats.org or (212) 407-6313. I look forward to hearing from you.
 

Legislative Update: The IRS Proposes Guidance Regarding Substantiation and Record Keeping for Charitable Deductions
 

Recently, the IRS issued proposed regulations concerning substantiation and reporting requirements for a donor to claim a charitable deduction. The proposed regulations provide guidance about provisions of the 2004 American Jobs Creation Act and the 2006 Pension Protection Act that impact cash and non-cash charitable contributions.
 

The proposed regulations make clear that a donor can claim a deduction only if he/she maintains and provides the proper records. For cash gifts, the donor must maintain a record showing recipient's name, date, and amount of contribution.
 

For non-cash gifts, the requirements are based on the amount of the charitable contribution as follows:
 

Non-cash gifts less than $250 .................................. Donor must obtain a receipt from the charitable recipient.
 

Non-cash gift greater than $250 but no more than $500........... Donor must obtain written acknowledgement of the gift.
 

Non-cash gift greater than $500 but no more than $5,000.........Donor must obtain written acknowledgement and file Form 8283 with the tax return on which the deduction is claimed.
 

Non-cash gift greater than $5,000 ............................ In addition to the written acknowledgement and Form 8283 filing, the donor must obtain a qualified appraisal.
 

Non-cash gift greater than $500,000 ............................ In addition to the other substantiation and reporting requirements, a donor must attach the qualified appraisal to the tax return.
 

The proposed regulations also address the statutory definitions related to "qualified appraisal" and clarify issues such as timing of the appraisal and limitations on charitable contributions of clothing and household items.
 

The ATS complies with all accounting and tax reporting requirements. The Planned Giving and Finance Departments work closely with our donors to help ensure maximum tax benefits for the charitable contributions to the ATS.
 

For a copy of the proposed regulations as they are posted in the Federal Register, click here: http://edocket.access.gpo.gov/2008/E8-17953.htm
 

The IRS is accepting public comments on the proposed regulations until November 5th. Please send your comments to me at mark@ats.org. We would like to know if you anticipate that the proposed regulations will be helpful.