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Outright Gifts
CASH
Direct gifts of cash are the most common form of giving and may be unrestricted or restricted for a specific scholarship, professorship, or academic program. Cash gifts are deductible up to 50% of a donor's adjusted gross income. Any excess can be carried over for five additional years.
APPRECIATED PROPERTY
Definite tax advantages exist for giving property that has appreciated in value and has been held long-term. An income tax deduction is allowed for the full fair market value of the property given. In addition to receiving a charitable deduction for the full fair market value of such a gift, the donor pays no capital gains tax on the appreciation when the gift is made. Such a gift is deductible up to 30% of a donor's adjusted gross income. Any excess can be carried over for five additional years.
Donors may elect to deduct a gift of long-term appreciated property at the 50% limitation of their adjusted gross income. However, the donor must forego the appreciation in computing the charitable deduction. In other words, the deduction is limited to the donor's cost basis. A donor considering a gift of property that has gone down in value would be better off selling the property and then contribute the proceeds to Wake Forest and receive a charitable deduction.
CLOSELY HELD SECURITIES
A gift of closely held securities, such as one from a family corporation, usually provides the same benefits as a gift of marketable securities — a full charitable income tax deduction and no capital gains tax. For donors who do not wish to give up control over any part of their closely held stock, there is still a way to make a gift. The donor makes an outright gift of stock to Wake Forest, and at a later date, the corporation may purchase the stock back for cash. As long as the University is not obligated to sell the stock back to the corporation, the transaction should produce no adverse tax effects.
TANGIBLE PERSONAL PROPERTY
Gifts of tangible personal property — such as art, jewelry, antiques, gold, or silver — provide an immediate tax deduction. The amount of the deduction is determined by whether the gift is related to the educational purposes of the University. If so, the donor is entitled to a charitable deduction for the full fair market value of the property, subject to the 30% ceiling and carryover provision. If use of the property is unrelated to the exempt purposes of the University, the donor is entitled to a charitable deduction for his or her cost basis in the property. When the donor is the creator of a contributed tangible asset, the deduction is limited to the actual cost of producing the asset.
