While you are considering your income tax savings, this may also be a good time to consider long-term tax savings for your heirs by including OLT in your will.  The federal estate tax’s top rate is 40% for 2013 and future years as enacted by Congress and President Obama in the American Taxpayer Relief Act.  That’s a higher tax bite than the federal income tax rate!   However, one needs to remember that one’s heirs WILL NOT RECEIVE THE STEP UP IN COST BASIS ON ANY INVESTMENTS from your estate, thus there will be no escaping the capital gains tax if they liquidate an asset.  The only way to avoid the capital gains tax is to give the appreciated asset to a charity who can then sell it.  The donor receives credit for the full market value of the donation.  It definitely pays to do some advance planning with your attorney and other professional advisors, especially since estate plans can be made flexible enough to change as your life and the laws change. 

We hope you will consider a charitable bequest in your will to benefit OLT while you save on estate taxes.

Share Your Bequest with Orient Land Trust

Thank you for thinking of OLT in your estate planning. There are multiple ways to donate from your estate and this article is a good overview, https://www.aarp.org/money/taxes/info-2023/how-to-donate-to-charities-in-your-will.html  

Your attorney and accountant will be able to give you the best advice and implement your wishes in your estate planning documents.

To properly identify OLT in those documents use our legal name and EIN as follows.

Legal Name: Orient Land Trust
EIN: 84-1582988
Street Address: 64393 County Road GG, Moffat, CO 81143

Please let us know if you have any other questions.

How it works

1. You transfer your residence, farm, or vacation home to OLT subject to a life estate.
2. You continue to live in the property for life or a specified term of years, while continuing to be responsible for all taxes and upkeep.
3. The property passes to OLT when your life estate ends.

Benefits

• You receive gift credit and an immediate income tax deduction for a portion of the appraised value of your property.
• You can terminate your life estate at any time and take an additional income tax deduction.
• You have the satisfaction of making a significant gift now that benefits OLT later.

If you are considering a major gift, your gift of cash or stock in the form of a “Life Income Gift” can significantly increase your income!

A life income gift allows you to transfer assets, and yet continue to receive income from the cash, stock, or other property contributed.  A life income gift can allow you to:

1)      Increase your income for life

2)      Receive a generous charitable contribution

3)      If you contribute stock, avoid any capital gains on the appreciation

A life income gift is often made through a trust arrangement called a “unitrust” or an “annuity trust”.  With a unitrust, you and/ or your spouse (or another beneficiary) receives annually a fixed percentage of the fair market value of the assets in the trust.   The income will vary year-to year, based upon how the trust’s investments perform.  With an annuity trust, you and/ or your spouse (or another beneficiary) receives a fixed amount from the trust each year.  This amount is agreed upon when you create the trust; it stays constant, no matter what happens with the stock market or interest rates.

If you have already considered OLT in your will, please note that a life income gift can often be preferable.  Such a gift allows you to accomplish your philanthropic goals during your lifetime – and in a tax-advantaged way.

If you own a life insurance policy that is no longer needed, consider it as the perfect vehicle for a year-end charitable gift.

How it works

1. You can provide now for a future gift to Orient Land Trust by naming us as beneficiary of a policy insuring your life.
2. If the policy has a cash value, you can take a charitable deduction approximately equal to the cash value at the time of the gift. 
3. In addition, if annual premiums are still to be made and you continue to pay them, those premiums will become tax deductible each year.
4. At death the proceeds are paid to OLT, and we apply them to the program you have designated.

Benefits

• You can make a significant gift from income instead of capital.
• You build our future conservation goals.

(It’s easy to contribute a life insurance policy to OLT.  Just check with your life insurance agent for details on which forms to complete.)

Special Tax Incentive for IRA Gifts

Temporary legislation allows donors aged 70½ and older to direct distributions of up to $100,000 per year from their IRAs and ROTH IRAs to Orient Land Trust, without incurring income tax on the withdrawal. This is a significant incentive that removes the tax penalty for some donors who want to use their IRAs to fund a charitable gift.

What You Should Know:

• Gifts must be outright — the donor cannot use the distribution to fund a life-income gift such as a charitable gift annuity. Gifts can only be made from a traditional or Roth IRA — other types of retirement plans are not covered by the law. 
• If a donor has retirement assets in a 401(k), 403(b) etc., he or she must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to OLT.
• A donor will receive no charitable income tax deduction for the distribution from the IRA. However, gifts from an IRA will not count toward the deduction limitation* for charitable gifts. This means that a donor whose gifts from non-IRA assets have reached his deduction limitation for the year can make an additional gift from his IRA with no penalty.
• Total charitable IRA distributions to OLT, plus any other charity the donor benefits, cannot exceed $100,000 per year.

How it Works:

1. Current legislation gives donors aged 70½ and older an opportunity to direct lifetime distributions from their IRAs and ROTH IRAs to OLT without incurring income tax liability on the withdrawal through December of the tax year.

• Distributions to OLT and other charitable beneficiaries can total $100,000 and must be made outright — they cannot fund a life-income gift.  Learn more about this opportunity and how you can make a gift to conservation through your IRA.  Alternatively, contact us and we'll be happy to give you more information about this charitable incentive.    

1. 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 OLT. These gifts can be made outright or can fund a life-income gift and will generate a charitable deduction for the donor.
     (borrowed this picture box from TNC – insert OLT logo on right here and change text to reflect “OLT receives plan tax-free”)

Please note that Orient Land trust cannot render tax or legal advice and we urge you to consult with your professional advisor about your situation before making a charitable gift.

How it works

1. You transfer a painting, antiques, collectibles or other personal property to OLT.
2. OLT may elect to hold the property and display or use it in the furtherance of its mission.  OLT may elect to sell the property at some point in the future and use the proceeds for its programs.

Benefits

• You receive gift credit and an immediate income tax deduction for the appraised value of your gift and pay no capital gains tax, provided your gift satisfies the "related use" requirements of the IRS.
• In certain cases, you can use personal property to fund a life-income gift, such as a FLIP Unitrust, that benefits OLT and provides you with income now.
• You can have the satisfaction of making a significant gift now to OLT without adversely affecting your cash flow.

Special Note

If you are interested in donating a vehicle, please contact your OLT office for more information vehicle needs.

How It Works:

1. You give shares in a closely held corporation or an investment partnership to OLT. 
2. OLT receives income distributions, and may sell the shares to a third party.

Benefits:

• You receive gift credit and an immediate income tax deduction for the appraised value of the business interests, net of any other liabilities that may pertain to it.
• You may be able to use a business interest to create a life-income arrangement, such as a flip unitrust.
• You have the satisfaction of making a significant gift that benefits both you and OLT during your lifetime.

If you have owned your home, a vacation home, apartment building, retail buildings, acreage, or a ranch for many years, a charitable gift of that real estate can be especially tax-advantageous.  The property may have so appreciated in value over the years that its sale would result in sizeable capital gains tax.  If given to OLT instead, you avoid the tax and, at the same time, realize a charitable deduction for the full fair market value of the real estate. 

You may also wish to consider a gift of your personal residence or ranch, reserving the right to continue to live in the house or ranch property for life (and if applicable, the lifetime of your surviving spouse).   Through such an arrangement, you will be entitled to a current income tax deduction for a portion of the fair market value of the property.

• Types of Real Estate Gifts

OLT accepts two types of real estate gifts — both of which are critical to our work:

• Gifts we call "trade lands" — real estate gifts that donors permit us to sell, with the proceeds going to support our work. Examples of those are mentioned above.
• Land which donors would like to permanently protect through permanent conservation easement or in-fee donation:  
• Conservation Easements
  A most important tool, these binding legal arrangements provide both land preservation and continued private ownership.  Becoming part of the title of the property, such easement restrictions can be tailored to the landowner's interests and, under OLT monitoring and enforcement, remain in effect regardless of future ownership.
• Land Acquisition
  OLT may identify and acquire environmentally-important land for landscape protection according to its Land Conservation Master Plan, generally sought as an outright in-fee donation or acquisition at a bargain price which affords tax deductibility to the seller

OLT is not able to protect or receive all of the real estate that is offered to us for protection through conservation easement, bargain price acquisition or in-fee donation.  The decision to accept or decline land in the San Luis Valley for preservation through conservation easement, bargain price acquisition or in-fee donation is made by OLT’s Board of Directors in conjunction with its mission and Land Conservation Strategic Plan.  If you are interested in making such a gift, please contact OLT’s Executive Director, Doug Bishop.

Year-end is an excellent time to consider a gift of stock

 Giving long-term appreciated stock or mutual funds offers you a two-fold tax saving.  First, you avoid paying any capital gains tax on the increase in value of your stock.  In addition, you receive a tax deduction for the full fair market value on the date of the gift.  For income tax purposes the value of such gifts may be deducted up to an allowable amount determined by the IRS -- please check with your tax advisor.

Example: If you purchased stock many years ago for $1,000 and it is now worth $10,000, an outright gift of that stock to OLT would result in a charitable deduction of $10,000.  In addition, you permanently avoid paying capital gains tax on the $9,000 of appreciation.

Your gift of stock or mutual funds can also be used to fund a charitable gift annuity, diversifying your portfolio and/or securing a stream of income.

How it works

1. You transfer securities to Orient Land Trust and receive an income tax deduction.
2. OLT sells your securities and uses the proceeds for its programs.

Benefits

• You receive gift credit and an immediate income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.
• You pay no capital gains tax on the securities you donate.
• You can direct your gift to a specific fund or purpose.
• You have the satisfaction of making a significant gift now or funding a life-income gift that benefits OLT later.

There is no easier way to garner a charitable deduction for 2013 – and support Orient Land Trust at the same time – than by simply writing a check or making a donation on-line with a credit/ debit!  When renewing your membership in OLT, please consider adding on a donation to support the broader mission of OLT that includes, besides the hot springs, open space land conservation, environmental education, sustainable agriculture/ ranching practices, holistic grazing and permaculture systems, and job skills training for youth of the valley.   

Benefits of a Gift of Cash

• It’s the simplest asset with which to make your donation — no appraisal or acceptance requirements as with gifts of appreciated property. 
• Delivers a gift that Orient Land Trust can use immediately and is the easiest for OLT to accept.
• You receive a full charitable deduction, and apply it against a larger percentage of your taxable income than a deduction for a property gift.

There's an extra benefit:

You can claim the entire amount of your cash gift as a charitable income tax deduction up to the amount allowable by the IRS – please consult your tax advisor concerning this allowable amount.  

Make sure your mail envelope, money-order, wire transfer or on-line donation is postmarked, dated or charged by the end of the year on December 31st.   If it is, your gift will qualify as a 2013 gift even if it not received by OLT until the first week of 2014.  The check should be made out to Orient Land Trust. 

REMEMBER

Although a cash gift can provide immediate benefit to OLT, you can also use it to fund a life-income plan such as a charitable gift annuity.