Giving
Tax Advantages of Your Gift
Giving to the Diocese of Raleigh can bring several tax advantages. You should always speak to your accountant or your attorney regarding your taxes, this general information may help you make a decision about how or when to give.
Federal Tax Advantages
Contributions to the Diocese of Raleigh are deductible as charitable contributions within the limits of the Internal Revenue Code.
Federal Tax Advantages—Cash Gifts
Cash gifts are deductible up to 50 percent of adjusted gross income, with any carryover applied within five years. Example: The net cost of a $1,000 cash gift to a donor in the 28 percent marginal tax bracket is only $720 after the $280 tax savings.
Federal Tax Advantages—Personal Property (Gifts-in-Kind)
Gifts-in-kind (books, works of art, etc.) are deductible at the full fair-market value if they are related to the activities of the Catholic Church and have been held for more than one year by the donor. Unrelated gifts-in-kind also may be made but do not qualify for a deduction.
Federal Tax Advantages—Gifts of Appreciated Property
Gifts of appreciated property (securities and real estate) held for more than a year are deductible up to 30 percent of adjusted gross income with no capital gains tax on the appreciation for outright gifts. The deduction is based on the fair market value of the donated property. Gifts of appreciated property held for less than a year are deductible only up to the cost basis in the property, with a limit of 50 percent of adjusted gross income. With careful planning, charitable gifts of certain types of assets will provide even greater tax benefits to the donor than a gift of equivalent value in cash.
The charitable deduction for gifts of property that would yield ordinary income or short-term capital gain if sold is limited to the donor's tax basis (usually the original cost of the property). Gifts of appreciated property held long-term provide a double tax benefit.
Example: Mrs. Conway, who is in the 28 percent income-tax bracket, owns securities currently valued at $15,000, which she purchased several years ago for $3,000. She contributes the securities to charity and realizes a $15,000 charitable deduction, which saves her $4,200 in income taxes (28 percent x $15,000).
In addition, Mrs. Conway avoids the potential capital-gain tax on her $12,000 paper profit. This means a further savings of $1,800 (15 percent capital gains tax x $12,000). Thus, the actual cost for Mrs. Conway for the gift of $15,000 in appreciated securities is only $9,000 ($15,000, less $4,200, less $1,800).
The full fair-market value of gifts of long-term appreciated securities or real estate is deductible up to 30 percent of a donor's adjusted gross income. Any amount in excess of the 30 percent ceiling can be carried forward for up to five years.
Tax advantages of Deferred/Planned Gifts
Detailed tax provisions apply to deferred and planned gifts. Please visit our section on Deferred and Planned Gifts to obtain general information on how taxes apply to these types of gifts. Your accountant, attorney or financial consultant can help you understand how the tax law applies to you.
To learn more about ways to give to the Diocese of Raleigh, its parishes, schools, ministries and Catholic Charities please contact the Office of Stewardship and Advancement at (919) 821-9721, or by email to tim.breslin@raldioc.org.