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San Diego, CA. 92103-6397
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Frequently Asked Questions
What kinds of gifts can I make through the Episcopal Church?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property) to support the church.
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 of value: cash, publicly traded securities, the balance of your retirement account, and real and personal property. (These latter assets can deliver significant benefits but are more complicated to transfer and administer, and must be reviewed by us before we can accept them as gifts).
What tax deduction will I receive for my gift?
It depends on the form your gift takes:
Outright gifts generate an income-tax charitable deduction for their full value.
Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains – a great tax benefit!
Similarly, life insurance distributions to the church are not income-tax deductible, but are exempt from estate tax. If you have made the church the irrevocable owner of a policy during your lifetime, however, you may deduct annual gifts that offset our premium payments (for more details on this point, see below).
Can the Episcopal Church 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 my church 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 church must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
Can I transfer my IRA to the Episcopal Church 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 the church. 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.
I’d like to donate a painting. Will the the Church 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. We can assist you on this point.
I’m interested in establishing a charitable gift annuity. What financial provisions does the Church make for the income payments to me and my husband?
Your charitable gift annuity will be treated as a general obligation of the Episcopal Church, backed by all its assets. They have an unbroken record in making timely payments to our annuitants, and that ongoing responsibility is a key element in their financial policies.
What is a total return spending policy?
A total return spending policy is one in which the combination of income earned and the change in capital value is taken into account when determining how much to draw from a portfolio over a specified time period. For example, if a congregation were to adopt a 50% spending policy, each year the parish would draw down a distribution worth 50% of the account's market value. Though the assets in the principal may have earned less than 50%, the additional funds would be withdrawn from principal. But the principal may have appreciated 8-10- 150% during that year, so the total value of the portfolio at the end of the year is still greater than it was at the beginning of the year.
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. * Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however. * Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to the Episcopal Church's mission. The Development Office can advise you on this point.