December 10, 2003

Foundation Official Offers
Tips For Year-End Giving

As the holiday season approaches, many people are filled with the spirit of giving. Often this includes charitable donations, timed to take advantage of the tax deductions available for these contributions.

Whether or not the gifts are to benefit the University of Connecticut, Nancy Schroeder of the UConn Foundation says there are several things to consider when making donations at the end of the year:

Gifts of appreciated securities held for more than 12 months earn a charitable income tax deduction equal to the property's full fair-market value, subject to a limit of 30 percent of adjusted gross income. Plus you can avoid paying capital gain tax on the appreciation. If the entire deduction cannot be used in a given year, it may be carried forward and used in future years.

For those wondering whether to sell depreciated stocks or other securities they hold, instead of simply absorbing the loss at this time, Schroeder suggests selling the securities, taking the tax deduction for the loss and giving the proceeds to charity. The tax benefit from the charitable donation may further offset any other capital gains.

Generally, charitable gifts are completed when control of the assets is transferred from the donor to the charity. "This means different things depending on the method of transfer," say Schroeder. "For example, a mailed gift is effective on the postmark date, not the date the check or the certificate is 'signed over.' If a gift is physically handed to a representative of the charity, that becomes the effective date of the gift."

Electronic transfers are slightly more involved. In these cases, a gift is effective when the funds are received in the charity's bank or brokerage account, rather than the date you instruct your bank or broker to make the transfer. Also note that gifts of mutual fund shares may require additional paperwork and take longer to transfer than shares of individual securities, so it is wise to alert the charity several weeks before making such a gift.

Determining what and how much to give ultimately depends on your personal financial and tax situations. "Contact your tax advisor to determine what will work to your best advantage," Schroeder urges.

If you have questions about making a gift to the University or setting up a gift to provide a steady income stream plus tax benefits, contact the Office of Gift Planning at 860.486.5000 or by e-mail: contactus@foundation.uconn.edu.