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Gift
of Land
Gifts of land can be an ideal way to give to the Newton
Community & Healthcare Foundation. Below is one woman's story:
After inheriting farmland north of Newton, 87-year-old Freda
Spangler
realized she had some decisions to make.
The sale of her prime real estate would have serious tax
consequences. In addition, she wanted to benefit several
charities from
the final proceeds of her estate.
After careful consideration with her financial advisors,
Freda chose
to give a portion of the farmland, valued at $50,000, to
Newton
Community & Healthcare Foundation in exchange for life
income in the
form of a charitable gift annuity.
The gift of land saved her more than $4,400 in capital gains
taxes,
and allowed her to increase her annual income with an annuity
rate of
11.4 percent.
Furthermore, the charitable income tax deduction of nearly
$28,000
will save thousands in income tax on her IRS Form 1040.
Part of her
future annual income will be tax-free, part will be taxed
as capital
gains at the 20 percent rate, and only a small portion of
the income
will be subject to ordinary income tax rates.
"This was really the best recourse for Ms. Spangler," said
Frank Spangler (a distant relative), NCHF's chairman of
the board. "She saved a considerable amount and helped herself
and charities at the same time, while receiving above-market-rate
interest on her annual income for the rest of her life.
"This is a great way to reduce your exposure to a portion
of taxes,
and still leave a benefit to charity when you pass on,"
Spangler added.
In addition, Freda's gift annuity arrangement with
NCHF allowed her
to designate several local charities as the recipients of
the remainder
value of the annuity at her death.
So she has locked in for life a generous 11.4 percent annual
income
as well as assured herself that her favorite charities will
benefit
substantially from her life-income gift.
NCHF uses gift annuity rates set by the American Council
on Gift
Annuities. Rates are dependent on the age of the annuitants,
and top out
at 12 percent for annuitants at age 90.
If you have any questions or are interested in a gift
annuity, call
Loren Friesen.
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