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Charitable Giving

The Imani Community Church and the Imani Community Foundation offer this valuable information to ensure you are aware of a powerful technique that may save you considerable money – as a qualified individual or corporation.  Charitable giving is a powerful and excellent opportunity to reduce your income taxes and reaps “real” cash savings for you.  The charitable giving tool represents a set of sound deliberations of Congress, to, in effect, provide government funding of every worthy cause by offering incentives to help approved nonprofit charities by allowing tax deductions for your gifts.  Both of our charitable organizations are stellar highly reputable, safe national organizations.

This tax benefit for charitable donations is covered under the precious few favorable tax rulings in effect to encourage charitable giving.  Indeed, you may even be able to come out ahead, rather than even consummating a straight sale, by donating your real estate property our approved 501(c)(3) Church or Foundation.

Review these scenarios, possibly similar to yours. We will explain the important guidelines and benefits.  The overall donor and property profile are possibly applicable to each scenario

Donor's Profile: 

• The donor is a high-income and high net worth individual (or corporation) with significant annual income tax liabilities.

• The donor is capable of considering realities other than the cash from the traditional sale.

• The donor has large equity in the property subject to capital gains, and associated taxes.

• Owner, family and financial advisors understand the benefits of philanthropic giving.

• Tax deduction is permitted up to 30% of the modified or adjusted annual gross income of the donor, per year, for up to five years.

• Other in-kind donations may also be allowed, related to the project.

 Property Profile:

• Owner’s land and improved real estate capable of use for the operations of the charity.

• Ideally, expensive property that has been on the market for a time for sale and may be subject to capital gains taxes. 

• Some of this available property may have been left in an estate and heirs do not need it. 

• Property must be in reasonably good condition with no major damage or hidden hazards. 

• Property must be unencumbered and wholly owned by the donor (s). 

• Property must be capable of being financed.

Examples of property include: expensive, unique, hard to sell second homes, apartments, vacation homes, rental properties and raw land.

HOW THE PROGRAM WORKS

Below are three examples of different real estate situations. We are delighted to estimate a similar, IRS approved, illustration to specifically fit you, or you may take this to your own tax adviser to determine if the program will work to your advantage.  

Example #1

• Assumption: Owner in high-income bracket ($1,250,000+ per annum)

• Property is appraised at $2,000,000 or more

However, when the property is donated to the Imani Community Church or the Imani Community Foundation, the owner may take annual charitable deductions of up to 30% of his adjusted gross income each year ($375,000 in this case) for up to five years, for a savings of $1,875,000. 

This is money that would have been paid directly to the government. Instead, the donation to the nonprofit will offset the entire amount over five years.

Example #2

• Asumption: Owner is in high-income bracket ($800,000+ per annum)

• Property is appraised at $1,250,000 or more

In the above case, if the property were sold at the asking price the owner would have a gross profit of $400,000. If capital gains apply, it may result in a 20% capital gains tax of $80,000, then marginal personal or corporate taxes are applicable in addition.

However, if the property is donated to the Imani Community Church or the Imani Community Foundation or the Imani Community Foundation, the owner may take annual charitable deductions of up to 30% of his adjusted gross income each year ($240,000 in this case) for up to five years, for a savings of $1,200,000.

This is money that would have been paid directly to the government  Instead, the donation to the nonprofit will offset the entire amount over five years.

Example #3:  Bargain Purchase

• Assumption: Owner is in high-income bracket ($375,000 + per annum)

• Property is appraised at $550,000

In the above case, if the property were sold at full value, the owner would have a gross profit of $300,000. If capital gains apply, it may result in a 20% capital gains tax of $60,000.  If a lesser offer is accepted, then further deduct that amount.

However, if the property is donated to the Imani Community Church or the Imani Community Foundation, the owner may take annual charitable deductions of up to 30% of his/her adjusted gross income each year ($112,500) for up to five years, for a total savings of $550,000.   Again, this is money that otherwise would have been paid directly to the government, and will offset the entire amount over five year.

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Frequently Asked Questions

How does this program serve the community and me?

This is an excellent opportunity for you to participate in building the future of our community; to be able to feel really good about supporting worthy programs; and take control of your tax situation. How many opportunities do we have to allocate money that would otherwise end up collected in federal income taxes by the ITS, into a positive, local community organization?

Foundations and churches which perform activities and acts of compassion to the community are in great need of private support at this time, as local, state and federal agencies continue to cut cultural and educational programming. The Imani Community Church or the Imani Community Foundation serves a broad range of support.

Your donation will help us with these vital projects. The real estate donation program is a win-win for all involved; the donor, our nonprofit charity, and the people we serve.

Are you willing to speak to my tax advisor or attorney?

We are willing and eager to explain this system to any advisor or family members, and will provide all backup information you or they may require to affect a gift.

What is the Imani Community Church or the Imani Community Foundation and what is its background?

The Imani Community Church or the Imani Community Foundation received its nonprofit charitable status and has been active since 1985. We are recognized by the Internal Revenue Service as a nonprofit educational/charitable organization charity (explained in the IRS publications). Originally we focused on being the primary nonprofit support organization for the community desiring to support human compassion-based activities.  

Since its inception, the Foundation and the Church have sponsored numerous exhibitions, lectures, and educational activities. The Imani Community Church or the Imani Community Foundation also has financially aided several nonprofit organizations, and needy individuals and is currently working on developing pervasive partnerships with city agencies; state and county help organizations, other churches and outreach organizations

The Imani Community Church or the Imani Community Foundation has received grants from the federal, state and county governments. We have produced fundraisers.

Who are the people that run the Imani Community Church or the Imani Community Foundation or the Imani Community Foundation?

The board of trustees and advisors are extremely experienced administrators from both the nonprofit and corporate worlds. The current officers include: Jacquelyn Donald-Mims Foundation CEO and Church senior pastor, with thirty years of global corporate financial and business management, and with non-profit management experience;  MBA, EE, and Masters and Doctorate in theology and ministry.

The Imani Community Church or the Imani Community Foundation has been staffed almost entirely by unpaid volunteers, and for its first three years, totally by volunteers. During 1999 some salaries were provided for our primary workers. Our financial records are open to any agent or donor who would like to see them.

Frederick C. Trump, the late father of real estate mogul Donald Trump, was a shrewd businessman who made an estimated $200 million in real estate. Seven years before his death in 1999, the elder Trump donated two apartment buildings, valued at approximately $33 million, to the National Kidney Foundation. The two buildings were expected to generate more than $600,000 in annual income for the nonprofit organization.

The reason behind Trump's generosity: Doubtless the developer believed the foundation's goals were ones worth supporting, but it is possible too that he, like many other high-net-worth individuals, donated the property to reduce the amount of estate taxes his family would pay after his death.

Of course, most Americans do not have a large real estate portfolio like Trump. But for those in the higher tax brackets, the donation of a Manhattan townhouse, a ranch in Montana or even an old family estate in Maine can help shave thousands, or even millions, off their heirs' eventual tax bill--and do good works at the same time.

Many charities and nonprofits, such as universities and arts groups, persuade Americans to donate by promising tax deductions in return for their generosity. Often such donations are an opportunity to offload investments and obtain a tax break at the same time. With real estate, instead of stock  from the portfolio, the donor has the ability to bequeath property that can either be preserved as a museum or headquarters, or sold for cash.

One of the advantages to the donor is that the size of the tax deduction is determined by the current market value of the property, as opposed to the cost of the property when it was purchased. For example, if a home bought years ago for $25,000 is appraised at $100,000 today, the donor gets the $100,000 deduction. (Moreover, by donating a property instead of selling it outright, donors can avoid paying brokers' fees.)

Sometimes there are intangible benefits as well. Often a donated estate will bear the donor's name, making the property a de facto memorial. For example, in 1983 the widow of Jefferson Patterson, a diplomat whose father founded National Cash Register (NYSE: NCR - news - people ), donated a 560-acre family farm in Maryland to the state for use as a park and archeological research center. The site is now known as Jefferson Patterson Park & Museum.

The question is whether it makes more financial sense to donate the property or sell it outright and use the proceeds of the sale to settle up with the taxman.

According to some experts, real estate donations are becoming increasingly popular. Chase Magnuson, president of Real Estate for Charities, based in Carlsbad, Calif., has been facilitating property donations (both corporate and private) to charities for the last eight years. Although Magnuson admittedly has a stake in the business--he consults charities about whether or not to accept real estate donations--he says the volume of real estate contributions is rising dramatically.

"It's one of the last appreciated assets a philanthropic donor can give," Magnuson says. "Most people's stock portfolios are down, and everyone wants to hold on to their cash."

Despite the increased volume of real estate donations, however, donors don't always get the great tax breaks they're seeking. Kevin Ondik, a tax partner at Friedman Alpren & Green in New York, has a large client base of high-net-worth individuals and says he has seen very few examples of clients donating property to charities for the sake of getting a tax deduction.

Please Note: this material is designed to provide general guidelines and information in regard to the subject matter covered. It is provided with the understanding that the Imani Community Church or the Imani Community Foundation of Ventura County is not engaged in rendering legal, accounting or other professional advice. If legal, accounting, real estate or other assistance is required, the services of a competent professional should be sought. We have a more comprehensive package available that includes the IRS publications, information about how to donate and forms that are used to make the donation. Also, we will be happy to meet with you and your donor to explain the program. If you have any further questions, please contact the Imani Community Church or the Imani Community Foundation or the Imani Community Foundation. 

Some of the greatest improvements in the history of the Imani Community Church or the Imani Community Foundation have resulted from being remembered by longtime friends and referred to other donors, and in their bequests. It's a fact that most of us will be able to give more upon our passing that we can give now. And what better a legacy than to help people in need? When you create or revise your will, you should obtain the assistance of an attorney. The Pastor and or Foundation CEO is available to work with you and your attorney to discuss how you can include the Church or Foundation in your estate plans.

Examples the various types of charitable bequests to the Imani Community Church or the Imani Community Foundation, a Texas nonprofit corporation to be used in such manner as the Board of Trustees of said Church or Foundation shall in its discretion determine," (or state gift condition). include:

Specific Bequest, of a specific dollar amount all right title and interest in described property...;)

Residuary Bequest: a residue of an estate, Proportional Bequest: a stated fraction of my estate, Contingency Bequest, in the event that a spouse, child) shall not survive me, then I give the same to the Imani Community Church or the Imani Community Foundation, a Texas nonprofit corporation..."

Gift or Bequest of Charitable Remainder Trust: A trust establish by will or separate agreement would state:

Gift or Bequest of Charitable Remainder Trust: A trust establish by will or separate agreement would state:

"Upon the death of (name of spouse, child), the trustee shall distribute all of the then remaining principal and income of the trust, other than any amount due to (spouse, child), to the Imani Community Church or the Imani Community Foundation, a Texas nonprofit corporation..."

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Gifts

Securities and Stock Gifts

Gifts of appreciated securities or stock can be one of the best and most advantageous ways of giving. If your gift of stock is one you have owned for more than a year, you may deduct the full fair market value of the stock as a charitable contribution, while bypassing all capital gains taxes.

Real Estate Gifts

Real Estate is treated the same way as gifts of appreciated stock. If you have owned the property for longer than a year, you can deduct it as a charitable contribution at the fair market value of the real estate without paying capitol gains tax.

Insurance Gifts

Life insurance is a unique way to give to charity. To qualify, the Church or Foundation needs to become the owner and beneficiary. No incidents of ownership should be retained. If the policy is paid up, your charitable contribution is generally the replacement value or cost basis of the policy, whichever is less. Ongoing premiums paid on a gifted life insurance policy also qualify for charitable deductions.

Personal Property

Gifts of tangible personal property related to the charity's exempt purposes are fully tax deductible at fair market value. Gifts of tangible personal property given to charity which are not related to its tax-exempt purposes are limited to cost basis for determining your tax deduction.

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