Facebook CEO Mark Zuckerberg announced a $100 million gift to Newark, New Jersey’s struggling public school system, declaring that “teaching needs to be revered as a profession.” Some speculate the large donation was made in a move that could enhance his reputation just before the opening on an unflattering movie about him, “The Social Network.” Regardless of the motive, Newark Mayor Cory Booker welcomes the initiative in the Newark school system that has more than 40,000 students and a 50% graduation rate. Zuckerberg who is only 26, is listed as the 35th richest person in the U.S. by Forbes magazine. Full Article: CBS News
In addition to the altruistic and goodwill benefits any charitable contribution brings, it can also have significant tax advantages. If you donate funds to a nonprofit organization during a given year, you are eligible for a charitable donation tax deduction on your tax return. In order to receive this deduction, though, you must follow the IRS procedures to file it appropriately. There is what is called a 50/30/20 deduction limit on all charitable donations. This means the limit for cash contributions to charity is 50% of your adjusted gross income, the limit for property contributions is 30% of your adjusted gross income, and you may deduct contributions of capital gains assets up to 20% of your adjusted gross income.
Charitable donations may be a very effective estate planning tool. A charitable remainder trust offers flexibility, an income stream for life or a term of years, and significant tax benefits to you and your heirs. A charitable remainder trust is an irrevocable, tax-exempt trust in which you place assets to provide income for you during a specific period of time, for example your lifetime or a term not to exceed 20 years. At the end of that period, the remaining assets will be turned over to the charity of your choice. The trust can be funded with a wide assortment of assets, including bonds, mutual funds, stocks, and real estate. A charitable remainder trust may be complicated to set up. By establishing the trust, you forever relinquish your rights to the assets you put in the trust. Another consideration is that your heirs will not inherit the assets placed in this trust. Some donors compensate for this by purchasing a life insurance policy with some of the income generated by the charitable remainder trust or by using the savings incurred by the charitable income tax deduction.
The attorneys at Leeds, Morelli & Brown, P.C. have worked with a variety of families in Nassau and Suffolk counties, Manhattan, Queens, Brooklyn, Bronx, and Staten Island. For questions regarding estate planning, please contact an attorney at the Leeds Morelli & Brown P.C. law firm for a free consultation at 1-888-556-2529 or visit the firm’s website at www.lbestatelaw.com.