Ways of Giving

Outright Gifts

An outright gift is a gift transferred immediately from the donor to College. This gift can be in the form of cash, securities, tangible or intangible personal property, or real estate.

• Gift of Cash
A gift of cash is the simplest way to give. It is not subject to gift or estate taxes and you can deduct the gift amount on your federal income tax return (up to 50 percent of your adjusted gross income). If the gift total exceeds the gift ceiling for one year, you can carry over the remaining deduction to succeeding tax years until it's exhausted, or for up to five years, whichever comes first. With careful planning, nearly every outright gift to UK can be fully deducted.

• Gift of Securities
Appreciated stocks or bonds may be deducted at full fair market value with certain limitations: You must have owned them a certain amount of time (which varies depending on when you obtained them), and they must have increased in value. You can give away appreciated property and usually avoid the tax on the gain. Gifts of securities are deductible up to 30 percent of your adjusted gross income, with a five-year carryover.

• Real Estate
Almost any type of real property—a personal residence, a farm, a vacation home, a commercial building, or an undeveloped parcel of land—can be the subject of a gift. If the property is long-term capital gain property and given outright, you'll generally avoid any tax on the gain, reduce your taxable estate by the value of the gift, and receive a charitable contribution deduction for 100 percent of the fair market value of the property. Your actual income tax savings will depend on your tax bracket. You may deduct the value of the gift, up to 30 percent of your adjusted gross income. Under certain circumstances, however, you can choose to quality for a 50 percent annual deduction by reducing the value of your gift to its cost basis.

• Tangible Personal Property
This includes such items as works of art, antiques, books, gems, etc. You may take a deduction based on the item's fair market value, provided the University's use of the property is related to its educational function. Otherwise, the deduction is based on the lesser of the item's cost basis or fair market value.

• Intangible Personal Property
This includes items that cannot be seen or touched, including copyrights, securities (discussed earlier), patents, contracts, promissory notes, royalties, trademarks and the like. Unlike tangible property, intangible personal property does not have to be scrutinized (for income tax purposes) for its relevance to the University's tax-exempt mission. These gifts are treated the same as tangible property in terms of tax deductions, and are not subject to estate or gift taxes.

Planned (Deferred) Gifts

Planned or deferred gifts are gifts that will benefit the College in the future. Unlike outright gifts, planned gifts may take many forms. Usually these gifts include bequests, life insurance and life income gifts such as charitable remainder annuity trusts and charitable remainder unitrusts.

• Bequests
These gifts may take several forms, such as a specified amount of cash, specific pieces of property, a residuary estate after all expenses, debts, taxes and specific bequests are satisfied, a percentage of the residuary estate or a contingency bequest (when named beneficiaries are deceased or disclaim their bequests).

• Life Insurance
This type of gift can take two forms. The donor can may the College the owner of the policy, thus allowing the donor an immediate income tax deduction. Or the donor may name the College the beneficiary of a policy. Because the latter designation is revocable, it cannot be counted for any immediate tax savings. At the time of the donor's death, the executor of the estate may take a federal estate tax charitable deduction for the entire amount.

• Life Income Gifts

1. Charitable remainder annuity trusts
The donor can create a charitable remainder annuity trust by the irrevocable transfer of cash, securities or property to a trust for the College's benefit. In exchange, the donor and the donor's beneficiaries receive a fixed dollar amount, at least annually, for life or for a fixed term of up to 20 years.

2. Charitable remainder unitrusts
This gift is quite similar to the annuity trust, with one difference. Whereas a charitable remainder annuity trust pays a fixed amount of income determined at the time of the creation of the trust, the unitrust pays the donor or donor's beneficiaries a percentage of the trust assets, as revalued annually.

3. Charitable lead trusts
This gift planning vehicle allows you to shield more of your accumulated wealth from gift and estate taxes and make a current gift to the UK College of Dentistry. It is one of the most powerful estate planning tools available today. Under this plan you would irrevocably transfer assets to a trustee and provide payments to be made to the University for a certain number of years. Then the principal passes to your heirs at greatly reduced gift and estate tax rates and sometimes escapes them altogether.