On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law to help combat the far-reaching impacts of COVID-19. This law is designed to help you, businesses and nonprofits facing economic hardship during the coronavirus pandemic and offers significant incentives for those who are in a position to give.

We want to let you know about a few key provisions of the CARES Act and what giving strategies may be right for you. By taking advantage of this unique opportunity, only available this year, you can make a huge impact in Aggieland and benefit financially.

For those who itemize:

For those who do itemize their deductions, the new law allows for cash contributions to qualified charities, such as the Texas A&M Foundation, to be deducted up to 100% of adjusted gross income (AGI), up from 60% previously. The new deduction is only for cash gifts that go to a public charity; it does not apply to contributions to a donor advised fund or non-operating private foundations.

You might also consider generating cash and decreasing taxes by:

  • Selling depreciated securities that have declined in value below their cost. You could then realize the capital loss and contribute the cash.
  • Using a capital loss to offset gain on sale of appreciated assets, thereby avoiding capital gains taxes and using the cash proceeds to make a charitable gift without a percentage limitation.
  • Selling appreciated securities. While you would recognize a capital gain, you could donate the sale proceeds to eliminate taxation of ordinary income.

Additionally, if your assets are substantial enough that you can give more than your income this year, you won’t lose the deduction for the excess amount. Charitable contributions in excess of your income can be carried forward for five years subject to the 60% of AGI limit in those years.

For those who take the standard deduction:

The CARES Act allows all taxpayers to take a charitable deduction of up to $300, even if you do not itemize. In plain English, if you donate up to $300 in cash to a qualified organization like the Texas A&M Foundation, your AGI will be reduced by up to $300—and you can still claim the standard deduction.

A gift of this size can go a long way in supporting the Texas A&M cause you are passionate about, whether it be students, faculty, a college, or a particular program or department. You can browse hundreds of accounts on our online giving site to find an area that matches your interests and designate a gift. Looking for the perfect holiday gift for the person that has everything? You can even choose to make your gift in honor of a loved one.

 

Required Minimum Distribution Changes:

The new law temporarily suspends the requirements for required minimum distributions (RMD) for the 2020 tax year. This probably comes as a relief to many of you who would have had to withdraw a greater percentage of your retirement accounts. Many of our donors use their RMD to make a gift from their IRA. If you are 70½ or older, you can still make a gift from your IRA or name us as a beneficiary.

Additionally, the 2020 tax year expansion to the 100% AGI deduction limit creates the option of withdrawing funds and contributing a larger amount to charity, plus taking a charitable deduction to offset the taxable withdrawal. Check with your financial advisors to see how these rules apply to your plan and situation.

Contact Us and Your Advisors

The CARES Act is extensive and includes numerous provisions that could benefit you financially. Consult your advisors about these provisions and contact Angela Throne '03 at giftplanning@txamfoundation.com or by using the form below if we can help you with any gift planning opportunities.

Copyright © Texas A&M Foundation    |    Staff Login    |   Campus Clients