Change in tax law assists donors in making charitable gifts

As the year 2005 draws to a close, friends of Ferris State University may find applicable a new tax law when making gifts and charitable contributions to the University and other organizations. The Katrina Emergency Relief Act of 2005 allows donors to write off up to 100 percent of their income for cash donations made from Aug. 28, 2005, through the end of the year. This tax break is significant because donors usually cannot write off more than 50 percent of their adjusted gross income in deductions for charitable contributions. A provision of the law also allows for withdrawal of IRA funds at no penalty starting at 59 ½. What makes this option attractive for donors wishing to take a large portion of their retirement account and donate it to charity is the 100-percent deduction ceiling.

Gifts also may be made from 401(k) and other retirement plans. However, the 100-percent deduction ceiling makes gifts of stock a good choice. By selling the stock and making a cash gift, donors would save more from the charitable donation than what is paid in capital gains taxes.

For more information or to make a gift to Ferris State University, please contact the Ferris Foundation at (231) 591-2365 or fsufdn@ferris.edu. Details about establishing scholarships or endowments may be obtained from the Advancement Office at (231) 591-3825.