As you consider your year-end philanthropy, it may be beneficial for you to be aware of recent changes to the tax law under the Setting Every Community Up for Retirement Enhancement (SECURE) and the Coronavirus Aid, Relief, and Economic Security (CARES) Acts. Key changes under these Acts that affect charitable giving are noted in the charitable giving strategies outlined below.
In addition to the information provided here, you can learn more about charitable giving strategies under the new tax law by downloading our complimentary brochure, Tax Strategies for 2020 Charitable Giving.
Gifts of Cash
Gifts of cash are tax-deductible in the year the gift is made. For 2020, the CARES Act has two key changes that affect gifts of cash:
“Above-the-Line” Deduction for Cash Gifts in 2020
For taxpayers who take a standard deduction, a $300 “above-the-line” deduction is now available for gifts of cash, but the gift may not be to a donor advised fund or supporting organization.
100% Charitable Deduction Limit
For 2020, the CARES Act increases the deduction limit from 60% to 100% of adjusted gross income (AGI) for gifts of cash to charity (excluding donor advised funds and supporting organizations). The gift may be for any charitable purpose and is not limited to gifts for Coronavirus relief.
Instructions for giving gifts of cash via check, credit card and wire transfer are available at the links below.
If you would like your gift credited in the calendar year 2020, please see our year-end deadlines for details on ensuring your gift is received on time.
Gifts of Long-Term Appreciated Securities
Giving a gift of long-term appreciated securities is in most cases more tax advantageous than giving cash. This is because capital gains taxes can be avoided on gifts of long-term appreciated assets. For taxpayers who will not be able to itemize deductions in a given year, gifts of long-term appreciated securities are an especially important tool in their tax reduction tool kit. Please see the examples below:
|Gift Amount||Stock Basis||Tax Savings from Avoidance of Capital Gains||Tax Savings from Charitable Deduction||Net Cost of Gift|
*Based on 32 percent marginal tax rate and 15 percent capital gains tax rate
In other words, the cost of your gift of $1,500 may be reduced to a net cost of $885, resulting from a savings of $135 in capital gains tax and, if you are taxed at a 32 percent marginal tax rate, an additional $480 in savings from the income tax charitable deduction.
How to Give Securities to Notre Dame
The simplest way to transfer securities, such as stocks, to Notre Dame is through a depository trust company (DTC) transfer. For more information on how to transfer securities or to make a gift of securities, please contact Lisa Kresnak at 574-631-9947 or firstname.lastname@example.org. Please have the following information available when you call:
- The name and type of securities to be gifted (public, restricted, mutual fund, etc.).
- The number of shares.
- The date you intend to make the gift.
Gifts that Produce Income
Charitable gift annuities (CGAs) and charitable remainder trusts (CRTs) may provide an opportunity for you to make a tax-efficient gift to Notre Dame while at the same time securing quarterly payments to yourself or loved ones. Many people have an interest in the CRT program for its unique ability to leverage the Notre Dame Endowment to invest trust assets without fees. When you invest in a CRT with the Notre Dame Endowment, your gift will provide a lifetime income stream while simultaneously offering an immediate income-tax deduction for a portion of your gift.
IRA Charitable Rollover Gifts
While there have been recent changes to the tax laws* regarding traditional IRAs, owners of these accounts still have the opportunity to make qualified charitable distributions of up to $100,000 in the calendar year.
If you are 70 ½ years of age or older and have a traditional Individual Retirement Account (IRA), you can use your required minimum distribution to give to Notre Dame through an IRA Charitable Rollover gift. To make an IRA Charitable Rollover gift to Notre Dame, contact your IRA custodian and ask that your distribution be a charitable rollover to Notre Dame and include your name, address and how you would like the gift allocated in the transfer.
A corporate matching gift is an excellent way to increase the impact of your personal gift. By taking advantage of your employer’s matching gift program, you can arrange for an additional gift that can potentially double or triple the impact of your contribution. Detailed instructions for making a matching gift are available online. You may also contact us at email@example.com.
Remember to make your gift online to the University of Notre Dame by December 31 to ensure tax credit and eligibility for the football ticket lottery. Online gifts completed no later than midnight in your time zone on December 31 will qualify. To make your gift online, go to giveto.nd.edu.
IRS guidelines require online credit card transactions be completed by 11:59 p.m. December 31 (based on the time zone in which the gift is made) in order for those gifts to count toward 2020 tax deductibility.
|Mutual fund transfers||December 13|
|Mailed check||December 31|
|Online gifts||December 31|
|Phoned-in credit card gifts||December 31|
|Wire Transfers and ACH Gifts||December 31|
Indiana Tax Credits
Tax Credit for Individuals
Indiana will give you a 50% tax credit for each dollar you give to Notre Dame, up to $200 in donations or up to $100 of tax credit. The tax credit is applied to your state tax return, either reducing the amount of taxes owed or providing a refund on taxes paid.
This benefit is doubled for individuals filing a married or joint return to a total of up to $400 in donations yielding up to $200 in tax credit.
To take advantage of this opportunity, you must use the Indiana Department of Revenue Schedule CC-40 Indiana College Credit Form when filing your state income tax return.
Indiana Tax Credit for Corporations
Indiana corporations may receive 50% credit for gifts, not to exceed 10% of the company’s adjusted gross income tax or $1,000, whichever is less. For more details, please reference this information bulletin from the Indiana Department of Revenue website.
*The SECURE Act increased the age when required minimum distributions (RMD) apply from age 70 ½ to age 72. Benefactors can still begin making IRA charitable rollovers at age 70 ½. The CARES Act waived the RMD for IRA and other qualified retirement plan owners for the year 2020. Benefactors still have the opportunity to make IRA Charitable Rollover gifts of up to $100,000 in calendar year 2020 from their IRA.
The University of Notre Dame is an educational institution and does not provide tax, legal, or financial advice. Any document or information shared by our staff is intended to be educational. Notre Dame strongly encourages all of our benefactors to seek counsel from their own legal and financial advisors. Please know that any information or documents shared by Notre Dame cannot be used to avoid tax-related penalties. Past performance of endowment investments does not guarantee future performance.