Gifts that Provide Income
Charitable Gift Annuity
One gift that allows you to support Memphis Theological Seminary’s work while receiving fixed payments for life is a charitable gift annuity. A charitable gift annuity will give you regular payments for one or two lives, it will allow us to further our mission and education, and you can receive a variety of tax benefits, including a federal income tax charitable deduction.
Charitable Remainder Trust.
If you have built up a significant estate and are also looking for ways to receive reliable income, you may want to check out the benefits of setting up a charitable remainder trust. The benefits of a charitable remainder trust include: a partial charitable income tax deduction, potential for increased income, and up-front capital gains tax avoidance.
There are two ways to receive payments with charitable remainder trusts:
The annuity trust pays you each year the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in the market or trust investments.
The unitrust pays you each year an adjustable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust rises, so do your payments. If the value declines, however, so will your payments.
Additional Gift Options
Charitable Lead Trust (CLT)
Do you want to benefit from the tax savings that come supporting MTS, yet you don’t want to give up any resources that you’d like your heirs to receive someday? You can do both with a charitable lead trust.
There are two types of charitable lead trusts:
A charitable lead annuity trust pays a fixed amount each year to MTS and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust’s assets go up in value, for example, the payments to MTS will go up as well.
Here’s how it works: You set up a trust that will make annualized payments to MTS over 15-20 years. At the end of the trust period the assets will revert back to you or your heirs. You will receive an income tax deduction each year for the amount of the annual payment. Your heirs will receive an amount equal to the initial trust deposit. The CLT greatly reduces income tax liability and transfers assets to heirs with ease.
Want to make a large gift to Memphis Theological Seminary without touching your bank account? Consider giving us real estate. Such a gift helps us continue our work for years to come. And a gift of real estate also helps you. When you give us appreciated property you have held longer than one year, you get a federal income tax charitable deduction. You avoid paying capital gains tax. And you no longer have to deal with that property’s maintenance costs, property taxes or insurance.
Another benefit: You don’t have to hassle with selling the real estate. You can deed the property directly to Memphis Theological Seminary or ask your attorney to add a few sentences in your will or trust agreement.
Ways To Give Real Estate.
You can give real estate to Memphis Theological Seminary in the following ways:
An outright gift. When you make a gift today of real estate you have owned longer than one year, you obtain a federal income tax charitable deduction equal to the property’s full fair market value. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes. By donating the property to us, you also eliminate capital gains tax on its appreciation. Furthermore, the transfer is not subject to the gift tax, and the gift reduces your future taxable estate.
A gift in your will or living trust allows you the ability to change your mind and the potential to support our work with a larger gift than you could during your lifetime. In as little as one sentence or two, you can ensure that your support for Memphis Theological Seminary continues after your lifetime and that your estate will benefit from a federal estate tax charitable deduction. A retained life estate. Perhaps you like the tax advantages a gift of real estate to our organization would offer, but you want to continue living in your personal residence for your lifetime. You can transfer your personal residence or farm to Memphis Theological Seminary but keep the right to occupy (or rent out) the home for the rest of your life. You continue to pay real estate taxes, maintenance fees and insurance on the property. Even though we would not actually take possession of the residence until after your lifetime, since your gift cannot be revoked, you receive an immediate federal income tax charitable deduction for a portion of your home’s value.
A deferred charitable gift annuity. Are you weary of taking care your property such as paying taxes, utilities and repair bills? Consider giving the property to Memphis Theological Seminary in exchange for dependable payments for life for you (and someone else, if you choose). With a charitable gift annuity, you’re allowed a federal income tax deduction in the year you set up the gift annuity when you itemize on your taxes. If you use appreciated real estate to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy.
A bargain sale. When you make a bargain sale, you sell your property to MTS for less than what it’s worth. The difference between the actual value and the sale price is considered a gift. A bargain sale can be a great way to move real estate that has appreciated, and it is the only gift vehicle that can give you a cash payment and a charitable deduction at the same time.
A charitable remainder unitrust. You can contribute any real estate you’ve owned for more than one year, provided it’s unmortgaged, in exchange for an income stream for life or a term of up to 20 years. The gifted property may be a home (a personal residence must be vacant upon contribution), undeveloped land, a farm or commercial real estate.
A charitable lead trust. This gift can be a wonderful way for you to benefit Memphis Theological Seminary and simultaneously transfer appreciated real estate to your family tax-free. You should consider funding the charitable lead trust with real estate that is income-producing and expected to increase in value over the term of the trust. A memorial or endowed gift. A gift of real estate may be a perfect way to honor your loved one forever. When you make an endowed gift of real estate, your contribution is invested with and becomes part of our endowment. An annual distribution is made for the purpose you designate. Because the principal remains intact, the fund will generate support for scholarships, operations or any area you chose in perpetuity.
A donor advised fund. When you transfer real estate to your donor advised fund, you avoid capital gains taxes and receive a federal income tax deduction based on the fair market value of the property.
Memorials or in Honorarium
If you, or a loved one, has been impacted by Memphis Theological Seminary, consider establishing a memorial or honoraria as a meaningful way to celebrate your loved one or to celebrate the incredible impact that MTS has made in your life. Your memorial or
tribute gift will make a lasting impact for the community of believers that we serve.
You have the power to strategically invest in the future of Memphis Theological Seminary. How? By making an endowed gift. Your gift is an investment in our future, helping us grow and thrive for years to come. You can select any area you would like to impact. Typically scholarships and operations are the two areas where most often endowed.