Charitable Giving Tools

produceThe Montana Qualified Endowment Tax Credit

The endowment tax credit provides exceptional benefits for donors. Individuals making planned gifts, such as a gift annuity, qualify for a Montana income tax credit of 40 percent of the present value up to $10,000 per year. Joint tax filers can qualify for a credit of up to $20,000 per year.

Businesses can take advantage of the tax credit too. With a direct gift to a qualified Montana endowment, a business will qualify for a tax credit of 20 percent of the donation. The limit is $10,000 per year. This credit applies to corporations, small businesses, partnerships, and limited liability companies.

Deferred Gift Annuity

A gift annuity is one type of planned gift. During the life of an annuity, the gift amount is professionally invested. At maturity (death of a donor) or relinquishment of beneficial interest (as early as five years from the date of the gift under current Montana law), the amount of the annuity is donated to the endowment of the charity selected by the donor. There are several advantages to gift annuities:

  • For donations as small as $5,000, a donor can provide permanent financial support to a favorite charity
  • Qualifies for the Montana tax credit and federal tax deductions
  • Benefits donors’ charities as soon as five years from the date of the gift

Charitable Remainder Trust (CRT)

A CRT provides a payment stream (cash flow) to donors or named beneficiaries. It also distributes the remaining assets to one or more designated charities at the end of the trust term. Click here for the Charitable Remainder Trust brochure (PDF download).

ADVANTAGES OF GIVING TO A COMMUNITY FOUNDATION AS COMPARED TO A PRIVATE FOUNDATIONtable1

In the chart shown above, the percentages refer to the maximum percentage of adjusted gross income allowed on the deductibility of charitable contributions in a taxable year.

farmOther tools and planned giving options include:

  • Individual retirement accounts  (IRA)
  • Pooled income fund trust
  • Charitable lead trust
  • Charitable life estate agreements
  • Paid-up life insurance policies
  • Donor advised fund

All tools and planned giving options listed above may qualify for the Montana Endowment Tax Credit. For more information contact us.