Support CC - Colorado College

If you itemize deductions on your tax returns, the first tangible benefit of making a gift of cash to Colorado College today is an income tax charitable deduction for the full value of the gift in most cases. The resulting reduction in income taxes payable lowers the net cost of the gift. If you are subject to state and/or local income taxes as well as federal, the combined marginal rate (after the federal deduction for those income taxes paid) should be taken into consideration in determining the gift's net cost.

If you don't usually itemize deductions, you may want to consider it for any tax year in which you make a sizable charitable donation. One technique used by people who have few itemized deductions is to alternate between years in which they take the standard deduction and make few charitable gifts, and the years in which they give double their usual annual philanthropic support and shift to itemizing.

Beware of the annual limitation on the use of charitable deductions claimed for gifts to public charitable organizations, which for any specific year is 50 percent of your adjusted gross income (AGI) for cash gifts. Any unused deductible amounts can be carried over and used for up to five additional years, if necessary.

If you predict that your estate will be subject to estate tax at your death, keep in mind that you receive a federal gift tax charitable deduction for the value of gifts of cash made during your lifetime. Since the value also is removed from the value of your future estate, it completely eliminates the federal estate tax. This savings reduces the net cost of your charitable gifts. Note that currently federal estate taxes are repealed for the year 2010, but Congress has several bills under consideration to reinstate federal estate taxes for anyone who dies in the year 2010 and beyond. What the final legislation will look like is unknown at this point. Check back later for future updates.

Outright Gifts and Their Results