Tax-Smart Gifts: Two Ways to Give
Making charitable contributions is an important component of your estate and tax planning strategy. Here are two tax-smart ways to support the future of Kean University while maximizing your strategic charitable giving.
Appreciated Securities:
Perhaps one of the most highly efficient ways to make a tax-smart gift, is to donate appreciated securities to the Kean University Foundation. Transferring appreciated securities directly to Kean helps you avoid the capital gains tax and receive an income tax deduction for the fair market value of the securities.
When you contribute assets that you have held for longer than one year that have grown in value – for example stocks, stock, bonds, or mutual funds – you receive a double tax benefit. You will pay zero capital gains and receive an income tax charitable deduction on the fair market value of the securities transferred. These dual tax savings can dramatically reduce your cost of making a gift to support the future of Kean University.
This example illustrates the tax benefits when contributing appreciated securities:
Cash Gift vs. Stock Gift
| Cash Gift | Stock Gift | |
| Gift Value | $10,000 | $10,000 |
| Income tax deduction | $10,000 | $10,000 |
| Income tax saved (assume 24% rate) | $2,400 | $2,400 |
| Stock purchase price | n/a | $2,000 |
| Increase in value | n/a | $8,000 |
| Tax avoided on gain (assume 15% rate) | n/a | $1,200 |
| Total tax savings | $2,400 | $3,600 |
| After-tax Cost of Gift | $7,600 | $6,400 |
The IRA Gift:
A qualified charitable distribution (QCD), sometimes called an IRA charitable rollover is a terrific way to make a tax-free contribution to Kean. If you are 70½ or older, you can tell your IRA administrator to transfer your contribution directly from your IRA account to the Kean University Foundation.
For tax year 2025, you can make QCD charitable contributions totaling up to $108,000 from your IRA. Your QCD contributions are not counted as income to you. Therefore, a QCD provides tax savings to donors who do not itemize charitable deductions.
Even better, if you are age 73 or older, you are probably subject to a Required Minimum Distribution (“RMD”) from your retirement account and RMDs are usually taxable. However, your QCD contribution counts toward your RMD without creating taxable income for you.
These are some requirements for a QCD contribution:
- You must be 70½ or older at the time of your contribution
- Your contribution must go directly from your IRA to the Kean University Foundation
- Spouses who meet the age requirments can each make contributions of up to $108,000 from their own IRA accounts
Your retirement plan administrator can help you make a qualified charitable distribution from your IRA. Many administrators provide a simple on-line form to make a QCD contribution. Be sure to follow your financial institution’s procedures to ensure you receive the tax benefits of a QCD.
