In addition to cash, gifts of assets, including stocks, bonds, and property (real estate) can             benefit MORF’s orthopaedic research. These donations provide you with charitable             deductions and can often offer additional tax savings.

Cash

Gifts of cash are the most common form of contribution and is not subject to gift or estate             taxation.             A cash gift entitles you to a charitable deduction of up to 50 percent of adjusted gross             income. If all deductible gifts in a year exceed the 50 percent limit, you may carry the             excess amount over as a deduction for up to five years.             For example, Carrie Bones has an adjusted gross income of $60,000 this year. She             contributes $35,000. She may deduct $30,000 this year and carry forward $5,000 to deduct             next year.             Gifts of Appreciated Securities and Other Assets             Appreciated stocks and bonds are often donated because they can offer you a greater tax             benefit than an equivalent in cash.             Using appreciated assets entitles you to a charitable deduction for the fair–market value of             the donated asset, and you can avoid paying capital–gain tax you would otherwise pay             upon the sale of the appreciated securities. This tax deduction may be up to 30 percent of             your adjusted gross income, and any amount over this limit may be carried forward for five             years.             For example, Harry Hip and Sally Knee decide to donate to MORF. Harry made his gift in             cash by sending a $10,000 check. Because he submits itemized tax returns and is in the             28 percent tax bracket, Harry can look forward to saving $2,800 in taxes. In other words,             his gift to charity will cost him only $7,200.             By contrast, Sally invested $5,000 in a hot stock that has grown to a value of $10,000 in             16 months. When she made a direct gift of her shares of stock to charity, she entirely             bypassed the capital–gain tax. Sally receives an income–tax deduction for a gift of             $10,000, which saves her $2,800 in taxes. (She, too, is in the 28 percent tax bracket.) In             addition, she also has saved $750 in capital–gain tax, since her $5,000 profit from her             appreciated stock would have been taxed at a 15 percent rate. It only cost Sally $6,450             to make her $10,000 donation.             Real Estate             Most types of real estate may be donated: undeveloped land, farms, commercial buildings,             vacation homes or your residence.             You receive a charitable deduction for the full fair–market value of the unencumbered real             estate. You may apply the deduction up to 30 percent of your AGI in the year of the gift             with the five–year carry–over provision. You avoid capital–gain tax on the appreciation you             have in the property and there are no gift taxes. Because you have removed the property             from your estate, you also have reduced your estate taxes.             For example, George Fracture bought a farm for $50,000 some years ago, and is about to             retire from farming and it is now worth $150,000. He sells it to MORF for $50,000 and can             deduct $100,000 for income tax purposes. As a result, he receives $50,000 from the             Foundation and can deduct the contributed portion of $100,000 for income–tax purposes.             John also must report a capital gain of $33,333.33. (The reportable capital gain is arrived             by dividing the sale price of $50,000 by the fair–market value of the property — $150,000             — and multiplying the result by the gain — $100,000.)             Tangible Personal Property             Everyone has tangible personal property of some value: works of art, antiques, jewelry,             rare books or other collections (such as coins or cars, for example). To give such items             to the MORF, you must have held them for more than a year. There are two types of             tangible personal property — items related to MORF’s purpose and items not related.             If you make a gift of a related–use item, you receive an income tax charitable deduction of             the appraised value of the gift on the date of the gift (up to 30 percent of your adjusted             gross income with the five–year carry-over provision). Gifts of unrelated items only allow             you a deduction of the item’s cost basis.