Charitable Giving Information

Posts Tagged ‘Giving’

Charitable Giving Recession

Question: How has the Credit Crunch and Recession effected people giving to charity?

Are people becoming less charitable? Have you seen any examples?

Answer: I can't say I've seen any examples although I'm sure that people will donate less in terms of physical cash. That said there are many other ways that people can give to charity like donating their time or old clothes/books etc so perhaps many people will seek to do that as an alternative.

Also if times are hard people will probably visit charity shops more and as such save themselves a lot of money - I like to think that they'll then feel the need to give something back by doing something like what i've mentioned above.

Charitable giving

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Charitable Giving Decline

Question: Think this is a Scam?

I got a phone call from a well known charity a few weeks ago, asking if they can send me some raffle tickets to sell. Being charitable, i agreed. No tickets arrived, then last night i got a phone call from a well spoken guy, who asked me to send the tickets and money back. I told him no tickets arrived, so he asked for a donation, and wanted my credit card details. I declined to give them out on the phone, so he asked me to send a cheque. The address is a PO Box, and he asked me to put my name and address on the back of the cheque, i think it sounds dodgy. I am not going to send a cheque, do you think this sounds a bit dodgy?
He said he was from the RNIB, and asked me to put that, and LSWW on the cheque, whatever that means.

Answer: Definately a scam, but I have not heard of this one. If he calls again ask for his phone number so you can call him back, see what happens.

UnIntended Consequences

Charitable Remainder Trust Tax Deduction

An annuity is both a contract with an insurance company and an investment. Your contributions (often called premium payments) to it are invested to produce earnings. This article explains when and what is taxed as income under annuitization, withdrawals, and gifts of your annuity.

An annuity has two phases: accumulation and annuitization. During accumulation – called a deferred annuity – both your contributions (i.e. premium payments) and their earnings accumulate within the contract. During annuitization (i.e. payout stage) you receive monthly payments while money remaining in the contract creates more earnings.

Most annuities are nonqualified. You can make unlimited after-tax contributions to them and their earnings grow tax-deferred. Only the tax-deferred earnings are eventually subject to income tax; your contributions come out tax-free as a return of your basis in the contract.

A qualified annuity is one regulated under government rules as a retirement plan. All contributions to them are deductible from income but, of course, must come from working income.

Annual contributions are limited like IRA contributions. Since they have no after-tax contributions, your tax basis in the contract is zero; so all withdrawals will be subjected to income tax.

Like all qualified plans, any withdrawal you make before reaching age 591/2, will have a 10% penalty tax imposed on it in addition to income tax. After reaching 701/2, you’re required to make minimum required distributions – just like IRAs.

Income taxation is imposed on:

* Annuitization

* Accumulation withdrawals

* Gifts of an annuity, and

* Beneficiary’s withdrawals

Let’s see how nonqualified annuities are taxed:

Taxation on annuitization payments:

Your monthly payouts are considered as made up of a contribution part and an earnings part. Only the earnings part is taxed as income. It’s a specific fraction of your payment equal to total earnings divided by the contracts total value – i.e. earnings plus contributions. After you’ve received all your contributions back in payouts, all future payouts are fully taxed as income.

Taxation on withdrawal from your deferred annuity accumulation:

Taking money out of your deferred annuity is a withdrawal. But earnings are considered to come out first. So anything you withdraw is taxed as income until all the earnings are out. Any withdrawal beyond earnings is a tax free return of basis.

Until you’ve turned 59 years old, the IRS imposes a 10% penalty tax on what you take out of your nonqualified annuity too.

This withdrawals taxation also includes cashing out your deferred annuity altogether. An early cash out may trigger an additional fee from the annuity company.

Taxation on a gift of your deferred annuity:

Gifting your deferred annuity to a person, charity or a charitable remainder trust, triggers income tax on the annuity’s earnings; that includes any 10% penalty tax too.

For gifting to a government-approved charity, your deduction is limited to your basis in the contract – i.e. the sum of your contributions.

Qualified annuities are taxed as above accept they have no basis – i.e. basis equals zero.

Taxation on beneficiaries and survivors:

Annuities that go to beneficiaries and survivors are considered as ‘income in respect of a decedent’ – and not as an investment. So an annuity – unlike an investment – doesn’t get a stepped-up basis.

So, any annuity payout to survivors and beneficiaries is subject to income tax – but only to the extent that money paid out to them exceeds the annuity’s basis -i.e. the original owner’s annuity contributions. So a portion of each payout will be attributed to the deferred tax on the earnings of those contributions and a portion will be return of basis.

As it was for the original owner, when the basis has been completely recovered through payments to the beneficiary, all further payments will be fully taxed as income.

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Shane Flait writes and consults on financial, legal, tax, and retirement issues. He gives you workable strategies to accomplish your goals.
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Article Source: ArticlesBase.com – Income Taxation of Annuities, When and On What?

Gift of a Remainder Trust in A Residence

Charitable Giving Christmas

Question: we desperately need charitable help (especially for xmas) but where can i go to apply/ask for it ?

my husband was injured at his last job and has been unable to work for months. we are barely getting by, about to be evicted, and i’m scared we won’t be able to give our son who’s only 1 christmas. my sister told me that last year her best friend’s family was “adopted” by a lady at tinker and she helped them and i’ve heard of “christmas connection” but i don’t know where to go, who to call, or basically how to go about asking or applying for the help. the only info i can find is all about ranking/ratings of different charities, where and how to donate to, or volunteer at them. we missed the last emsa backseat buddy day, and i haven’t even been able to find any other places or programs that will help me get a carseat for my little boy. i’d really deeply appreciate any information and/or help anyone might have.
thank you & happy holidays

Answer: Your son is only 1, he has no concept of Christmas. He certainly will not even notice if he gets nothing. For neccesities like food and carseats, look in the yellow pages under charitable organizations- there are lots of "family aid" resources that will help you out. If you are looking for money to buy a PS3, you should really think about your priorities in life.

A SPECIAL CHRISTMAS MESSAGE FROM RICK RICKLEMAN

Charitable Giving Down

Question: What do they know that we don’t ?

Bill Gates has stepped down from Microsoft’s CEO to concentrate on his Charitable Foundation (Kudos to Him). He has also donated the bulk of his wealth to the charity and again, I applaud his philanthropy.

Warren Buffet decides, in the same month to give away the better part of his worth to the same foundation.

My question is this: Why are these incredibly wealthy people all of a sudden feeling compelled (at this time) to give so much of their fortunes to charity ?

What is it about TODAY that is making these incriebly wealthy people so charitable What do they know that we don’t ?

Answer: That is an excellent question.

One theory....

When an individual has such an enormous amount of wealth and is so successful in their career and lives, at some point, they feel compelled to give back to the people in this world, who so obviously need financial assistance.

In addition to numerous wonderful causes, Mr. and Mrs. Gates have publicly expressed a desire and their decision to fund the redesign of the educational system in America. In my opinion, they couldn't be more on the money (no pun intended).

Mr. Buffet obviously respects and shares their beliefs and worthy causes and appears to have made the generous decision to join them in their efforts.

I think the public should be grateful and applaud them for their generosity.

NERDFIGHTERS: Conspicuous Charitable Giving!