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Frequently Asked Questions for Gift Planning
What are the three kinds of gifts I can give to The College of New Jersey ?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property). Upon your death you can make a gift through your will or with a distribution from a retirement plan or life insurance policy.
You also have the option of making a gift that returns lifetime income to you, your spouse, or other individuals, such as a charitable gift annuity, pooled income fund, or charitable remainder trust.
What sort of assets can I use to make a gift?
Almost anything: cash, publicly traded securities, the balance of your retirement account. Other assets can be very valuable but are more complicated to administer, and must be reviewed by us before we can accept them as gifts: real estate, closely held stock and artwork.
What tax deduction will I receive for my gift?
It depends on the form your gift takes:
- Outright gifts to The College of New Jersey generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains – a great tax benefit!
- Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to The College of New Jersey’s mission. TCNJ’s Office of Planned Giving can advise you on this point.
- Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however.
- Similarly, life insurance distributions to The College of New Jersey are not income-tax deductible, but are exempt from estate tax. If you have made The College of New Jersey the irrevocable owner and beneficiary of a policy during your lifetime, however, you may deduct annual gifts that offset premium payments (for more details on this point, see Question 5 below).
- The charitable deduction for a gift that returns income to you, such as a charitable gift annuity, a charitable remainder trust, or a pooled income fund is the fair market value of the gift asset minus the present value of the income interest you retain.
Can The College of New Jersey serve as the Executor of my estate?
No. State law, the limitations of our corporate powers, and our internal policies prevent us from taking such a role in your affairs.
I want to set up a life insurance policy, name The College of New Jersey as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
No. The IRS would not consider that a "completed gift" – they’d say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. The College of New Jersey must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
Can I transfer my IRA to The College of New Jersey to set up a life-income gift, and avoid income tax on the transfer?
Under present law, any lifetime distributions from an IRA are included in your taxable income, even if these funds are transferred to TCNJ. You do, however, receive a current charitable deduction when you establish a life income gift, which would partially offset the amount included in your taxable income. Proposed legislation would make the transfer tax-free, however. Watch our Website for updates.
I’d like to donate a painting. Will The College of New Jersey determine its value for my income tax deduction?
No, we can’t. The IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value. The appraisal has to be related to the gift, too – an insurance appraisal won’t suffice. TCNJ’s Office of Planned Giving can assist you on this point.
I’m interested in establishing a charitable gift annuity. What financial provisions does The College of New Jersey make for the income payments to me and my husband?
Your charitable gift annuity will be treated as a general obligation of The College of New Jersey, backed by all the Colleges assets. We have an unbroken record in making timely payments to our annuitants, and that ongoing responsibility is a key element in our financial policies.
I’m establishing a unitrust. My bank will serve as trustee, and I’m naming The College of New Jersey as the remainder beneficiary. My attorney is advising me to make that designation revocable. Will The College of New Jersey still recognize me as a donor?
We are grateful that you have named us as beneficiary. The charitable portion of your gift is deductible for income tax purposes (see Question 3 above). Because our interest is not irrevocable, however, we cannot give you gift credit until our remainder interest is payable or made irrevocable.
Please call The College of New Jersey Gift Planning Office at 609-771-3285 or 609-771-2393, or e-mail kubik@tcnj.edu for more information.
