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| Chestnut Ridge Chapter Lower Burrell Office 1816 Lincoln Avenue 2895-A Leechburg Road Latrobe, Pennsylvania 15650 Lower Burrell, Pennsylvania 15068 Phone: (724)-537-3911 Phone: (724)-337-6595 Fax: (724)-539-9502 Fax: (724)-337-6599 E-Mail: crcredcross@covad.net E-Mail: newken@redcross.nidhog.net |
Frequently Asked Questions
1. What assets can I use to make a gift to the American Red Cross?
Generally speaking, during your lifetime you can make an outright gift of
cash, securities or other property (e.g., real estate, personal property).
Through your will or with a distribution from a retirement plan or life
insurance policy, your gift can be designated to the American Red Cross in
accordance with your wishes.
2. What sort of gift plans also return income to me?
You have the option of making a gift that returns income to you, your
spouse, or other individuals, such as a charitable gift annuity, or charitable
remainder unitrust or annuity trust.
3. What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the type of gift, the time at
which it is made, whether it is outright or deferred or has any income
payments. In general, though, here are some guidelines:
Outright gifts to the Red Cross generate a full income-tax charitable
deduction. Outright gifts of appreciated securities are deductible at fair
market value, with no recognition of capital gains -- a great tax benefit!
Gifts of personal property, like art, books and collectibles, are fully
deductible so long as they are relevant to our mission. We can advise you
on this point. Click here for contact information.
Bequests do not generate a lifetime income tax deduction. They are exempt
from estate tax.
Similarly, life insurance distributions to the Red Cross are not income-tax
deductible, but are exempt from estate tax. If you have made us the
irrevocable owner and beneficiary of a policy during your lifetime, you may
deduct annual gifts that offset premium payments (for more details on this
point, see Question 4 below).
The charitable deduction for a gift that returns income to you, such as a
charitable gift annuity or a charitable remainder trust, is the fair market
value of the gift asset minus the present value of the income interest you
retain.
4. I want to set up a life insurance policy, name the American Red
Cross as beneficiary, but retain ownership of the policy. Can I
deduct the premium payments I make?
No. The IRS would not consider that a "completed gift" – they'd say that, as
the owner of the policy, you could change the beneficiary designation to a
friend or family member. We must be made the irrevocable owner of the
policy for gifts offsetting premium payments to be deductible.
5. I’ve heard that transferring gifts of IRA assets to charity are
advantageous. Why?
Qualified retirement plans such as IRAs, 401(k), 403(b), and Keoghs allow
individuals to defer paying taxes on a portion of their income until the
assets are withdrawn during retirement years. However, after a person's
death, these accounts are often exposed to income and estate taxes, at a
combined rate that could rise to 75% or even higher on large taxable
estates. The tax will be paid at some point—by your estate and your heirs
unless contributed to charity. In other words, by giving retirement assets to
charity you receive double benefits. Your estate and heirs will not be taxed
on the portion that goes to charity and you will support the Red Cross!
6. Can I transfer my IRA to the American Red Cross to set up a life-
income gift, and avoid income tax on the transfer?
New legislation gives donors aged 70½ and older an opportunity to direct
lifetime distributions from their IRAs to us without incurring income tax
liability on the withdrawal. The provision will be in effect for just the 2006
and 2007 tax years. Distributions can total $100,000 per year, and must be
made outright — they cannot fund a life-income gift. Just e-mail us and we'll
be happy to give you more information about this new charitable incentive.
Donors younger than 70½ can make a withdrawal from their IRA or other
type of retirement plan, pay income tax on the withdrawal, and donate the
proceeds to us. These gifts can be made outright or can fund a life-income
gift and will generate a charitable deduction for the donor.
7. I'd like to donate a painting. Will you determine its value for my
income tax deduction?
The IRS requires that donors of artwork and collectibles secure an
independent appraisal of the items to establish fair market value. The
appraisal has to be related to the gift, too – an insurance appraisal won't
suffice. We can assist you on this point.
8. I'm interested in establishing a charitable gift annuity. What
financial provisions will you make for the income payments to me
and my spouse?
Your charitable gift annuity will be treated as a general obligation of the
American Red Cross, backed by all of our assets. We have an unbroken
record in making timely payments to our annuitants, and that ongoing
responsibility is a key element in our financial policies.
9. If I create a bequest or life-income gift, will you continue to ask
me for annual contributions?
Your planned gift is a significant addition to our long-term financial strength
and our ability to meet the challenges and opportunities the future will
bring. However, today's efforts are supported through annual gifts and we
greatly appreciate and encourage any annual support you may want to
consider.
Frequently Asked Questions (For Allied Professionals)
What is the Federal tax identification number for the American Red
Cross?
The federal tax identification number is 53-0196605.
Can the American Red Cross serve as Executor for an estate?
The American Red Cross National Headquarters and local Red Cross
Chapters cannot serve as Executor for any estate due to potential liability
and conflict of interest issues.
Can the American Red Cross serve as Trustee of a charitable trust?
In certain instances the American Red Cross, through its National
Headquarters, can serve as trustee. Local Red Cross Chapters and other
operating units are not authorized to serve as trustee. The American Red
Cross may serve as trustee at the request of the donor if:
The contribution of cash or marketable securities to the trust is of
appropriate value, usually a minimum of $150,000; and the trust provides
for an irrevocable remainder interest to the American Red Cross of 100%.
OR
The contribution of cash or marketable securities to the trust is of
appropriate value, usually a minimum of $250,000; and the trust provides
for an irrevocable remainder interest to the American Red Cross of at least
50%.
OR
The contribution of real estate to the trust is of appropriate value; usually a
minimum of $250,000 and the donor agrees to serve initially as their own
trustee. The American Red Cross will then be named the successor trustee
of the trust once the property has been sold.
What are the ways in which a donor can designate their gift to the
American Red Cross through their will?
A donor can bequeath a sum certain or a percentage of their estate for
either specific or general purposes. The gift can be designated to the
American National Red Cross and/or a local American Red Cross Chapter.
How can I notify an American Red Cross Chapter about an estate
gift?
You can contact Bill Barger, Director of Development at (724) 537-3911.
Who can answer the bequest and legacy questions of an
executor/trustee?
Please direct inquiries to Andrea Morisi, Senior Counsel for Estate/Trusts,
at (202) 303-5348 or MorisiA@usa.redcross.org.
Is the American National Red Cross and the local Chapters of the
American Red Cross separate legal entities?
No. The American Red Cross is one legal entity. It is a tax-exempt
organization under section 501 (c) (3) of the Internal Revenue Code. The
federal tax identification number is 53-0196605.