Leaving a Legacy on a Budget

"One advantage of working with community foundations is the guidance they can give you about where gifts are needed and have the most impact on people in your community. We can do this through programs we offer, or even running a workshop for your family."

Once you've determined how your name will live on, how will you pay for it? While cash or gifts of stock are always good, perhaps you have something of value you aren't using. One person donated his reserved Internet domain name, which the charity sold for $200,000. You may have an insurance policy bought for a need that no longer exists, or a painting in the attic. Bequests of taxable IRAs are very tax efficient.

Depending upon a complex set of rules, you may be able to avoid tax on the gain from the sale and qualify for an income tax charitable deduction based on the market value of the asset donated. No matter how little you paid for something, a charity will take it at full value.

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