Glossary of Terms
As used in planned giving,
refers to the factors used to calculate the value of lifetime payments to
individuals or organizations.
Adjusted Gross Income
The sum of an individual’s taxable income for the year is
the total at the bottom of the first page of form 1040. Individuals may deduct
charitable cash contributions up to 50 percent of AGI and they may deduct gifts of
appreciated securities and appreciated property up to 30 percent of AGI.
arrangement to pay a fixed sum of money to an individual at regular intervals. The charitable gift annuity is a gift to the Legacy Fund that secures fixed lifetime
payments to the benefactor and/or another individual.
of the value of a piece of property. Benefactors contributing real or tangible
personal property (art, books, collectibles, etc.) to us must secure an
independent appraisal of the property to substantiate the value they claim as a
Securities, real estate, or any other property that has
risen in value since acquired by the benefactor. Generally, appreciated property
held by the donor for a year or more may be donated at full fair market value
with no capital gains cost.
purchase price for an asset, possibly adjusted to reflect subsequent costs or
depreciation. If Mrs. Quinn bought stock for $100 per share and sold it for
$175, her cost basis in the stock is $100 per share.
recipient of a bequest from a will or a distribution from a trust.
A transfer of
property to an individual or organization under a will.
Capital Gains Tax
federal tax on the appreciation in an asset between its purchase and sale
The permanently held capital of a non-profit, income and/or
principal from which is used to support ongoing projects and meet institutional
tax on the value of the property held by an individual at his or her death (paid
by individual's estate, not the heirs or recipients of bequests). In contrast,
state inheritance tax is applied to the value of bequests passing to
beneficiaries. It is also paid by the estate before the distributions are
named in a will to administer the estate (known in some states as the "personal
Fair Market Value
price that an asset would bring on the open market.
The individual transferring property
into a trust.
trust, the right to receive payments from the trust for lifetime or a term of
K-1 (also 1099-R)
IRS forms that we send our life-income gift participants detailing how payments
they received from their gifts during the year will be taxed.
Life Income Gift
planned gift that makes payments to the benefactor and/or other beneficiaries
for life or a term of years, then distributes the remainder to charity.
Securities, artwork, business interests and items of
tangible property as opposed to "real property," used in planned giving to refer
to land and the structures built on it.
See Executor, above.
In a trust, the portion of the principal left after the
income interest has been paid to the beneficiary(ies). A charitable remainder
trust pays income to the benefactor or other individuals and then passes its
remainder to charity.
term for the individual or organization who receives the trust principal after
the income interest has been satisfied.
making the will.
A transfer of
property by the grantor to the care of an individual or organization, for the
benefit of the grantor or others.
or organization carrying out the wishes of the person who established the trust
(the "grantor"), paying income to the beneficiaries and preserving the principal
for ultimate distribution.