Sharpe Blog

Sharpe Blog

Posted May 16th, 2017

Let’s Take a Look at Gift Annuities, Part 2

Read part one here. Donors and others often believe charitable gift annuities are like commercial annuities, but the two are different. A commercial annuity is a product that can only be purchased with cash. A charitable gift annuity, on the other hand as discussed last time, is a contractual arrangement that may be funded with… read more

Posted May 4th, 2017

Let’s Take a Look at Gift Annuities, Part 1

A gift annuity is a contract between a donor (or married couple) and a charity, whereby the charity promises to pay an annuity for either one life or two lives. The underlined terms bear consideration. The fact a gift annuity is a contract means a gift annuity is formed by offer and acceptance. The charity… read more

Posted April 17th, 2017

Let’s Take a Look at the Federal Gift Tax, Part 2

Last time, we encountered the $14,000 (for 2017) annual gift exclusion, which shields up to $14,000 a year given to any one individual from gift tax. For example, in 2017 Tillie gives each of her six grandchildren a check for $14,000: there is no gift tax; Tillie is allowed six $14,000 annual exclusions. Now, to… read more

Posted April 4th, 2017

Let’s Take a Look at the Federal Gift Tax, Part 1

The federal gift tax doesn’t raise much revenue (less than 2% of the total federal revenue). Like the estate tax, it is retained today for political, not revenue-raising, purposes. It’s a complex and tricky tax. There’s no reason for a gift officer to try to grasp the whole of it; but gift planners do need… read more

Posted March 24th, 2017

Let’s Take a Look at the Estate Tax Charitable Deduction

The estate tax charitable deduction is different from the income tax charitable deduction in several important ways. First, the estate tax charitable deduction is allowed for a gift (bequest) to a foreign charity, such as a university in England. The income tax charitable deduction is allowed only for gifts to U.S. charities. That’s why some… read more

Posted March 13th, 2017

What Happens to Assets in the Cloud When You Pass Away?

Educating donors on having clear estate plans is a valuable service you can offer and one that may show reward in charitable gifts via bequests. We’ve seen what can happen to the most famous of us who pass away without plans in place (see “Lessons Learned From Prince’s ‘Estate Plan’” in September 2017 Give &… read more

Posted March 6th, 2017

It’s Important to Know About the “Partial Interest” Rule: Part 3

A lot of “planned” gifts are partial interest gifts that are deductible because of exceptions to the general rule of non-deductibility. For example, the gift of a remainder interest in a qualified charitable remainder trust is deductible. What about gift annuities? These are not partial interest gift plans. A gift annuity simply involves the transfer… read more

Posted February 21st, 2017

“Partial Interest” Rule, Pt. 2

Read Pt. 1 of “Partial Interest” Rule by clicking here. Last time, we developed an analogy to grasp the concept of a partial interest and also learned that a charitable gift of a partial interest is generally not deductible. The analogy was a handful of uncooked spaghetti strands. The handful represents full and complete ownership… read more

Posted February 13th, 2017

“Partial Interest” Rule, Pt. 1

The partial interest rule denies a charitable deduction for many different kinds of charitable gifts, including some that are valuable. The key to understanding this rule is to grasp the concept of a partial interest. An analogy helps. Imagine you’re holding a handful of uncooked spaghetti. This is analogous, for example, to holding legal title… read more

Posted February 7th, 2017

Let’s Look at Bargain Sales

A bargain sale is the sale of an asset to charity for a price less than the asset’s fair market value (FMV). For example, a donor sells stock or real estate having an FMV of $100,000 to ABC Charity for $60,000 (selling price, or SP). Remember the meanings of “FMV” and “SP.” This situation is… read more

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