How Rotary can save you money

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The Planned and Major Gifts Division of Rotary International often advises members who are considering donations of US$10,000 or more on how to maximize the impact of their gifts, as well as the potential U.S. tax benefits. 

A charitable remainder trust is one in which the donor irrevocably places assets in exchange for an income, either for life or a certain number of years. This type of trust allows donors to reduce capital gains taxes on gifts of appreciated property and is a great strategy for incorporating charity into estate plans. It can be funded with cash, real estate, publicly traded stock, closely held stock, bonds (including tax-exempt bonds), and certain other assets. 

Income will be earned at a rate agreed upon by the donor and the Foundation, with a minimum of 5 percent of the initial trust principal. If Rotary is named the trustee for your charitable remainder trust, it will cover up to 50 percent of the fee charged by the custodian bank, Northern Trust, to administer the trust. 

Karena Bierman, senior planned giving officer for The Rotary Foundation, says that, for U.S. residents who include the Foundation as a beneficiary of a charitable trust, a charitable remainder trust passes the "four-win" test: Donors can receive a tax deduction in the year the gift was made, avoid capital gains taxes on the donation of appreciated assets, receive lifetime income from the donation, and enjoy recognition for the gift that supports the Foundation while they are still alive.

"Trust assets are invested right away to enable the Foundation to get the most out of the gift," Bierman says, "while the donor gets income and a tax benefit. That way it maximizes the benefit to both the donor and Rotary."

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