Other Considerations for Planned Giving

Limitations on Deductibility  |  Qualified Appraisals  |  2006 Federal Income Tax Rates

Limitations on Deductibility of Charitable Contributions

General Rule: For gifts of cash made to Luther Seminary, donors may deduct an amount equal to 50% of their adjusted gross income (AGI). If the entire contribution cannot be used in the year of the gift, a five-year carryover is allowed.

Limitations on General Rule: For gifts of long-term capital gain property (held longer than one year) such as stocks, bonds and other capital assets such as real estate, donors may deduct the fair market value of such property, but limited to 30% of their AGI. A five-year carryover is allowed.

Donors may elect to deduct only their cost (excluding any appreciation). In this case, their deduction is limited to 50% of their AGI. A five-year carryover is allowed.

For gifts of tangible personal property not related to the seminary’s purpose, such as jewelry, donors may deduct only the cost of the asset. The deduction is limited to 50% of their AGI.

For gifts of short-term capital gain property (held less than one year), such as stocks, bonds and other capital assets, donors may deduct the cost of the assets. The deduction is limited to 50% of their AGI.

Qualified Appraisals

In order to substantiate certain charitable contributions, a qualified appraisal (meeting certain specific requirements) is required for non-cash gifts valued at $5,000 or more, and for gifts of closely-held stock valued at $10,000 or more (see IRS Form 8283 and Instructions). An appraisal is NOT required for gifts of publicly traded securities.

2006 Federal Income Tax Rates

For single individuals:15% bracket begins at $7,550 (taxable income); 25% at $30,650; 28% at $74,200; 33% at $154,800; and 35% at $336,550.

For joint returns: 15% bracket begins at $15,100 (taxable income); 25% at $61,300;
28% at $123,700; 33% at $188,450; and 35% at $336,550.