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New Federal tax act makes sense for Valley donations
Donations will allow us to spread masonry through
scholarship and building renovations

By Ill... Wilbur B. Smith, 33°
Treasurer/Valley of Cleveland

The Federal Government enacted the new tax act of 2001 that may influence how you make a gift. With income tax rates as high as 38.5 percent this year, there may be no better time than now to consider making a gift to the Scottish Rite, Valley of Cleveland Foundation.

Of course, giving is about much more than tax deductions. Your contributions to the Foundation makes a meaningful difference in the maintenance of our building and other charity work done by your valley.

Giving long-term appreciated stock offers you two-fold savings. First, you avoid paying Capital Gains Tax on the increased value of the stock. Second, you receive a tax deduction for the full market value of the stock on the date of the gift.

You can avoid paying the 20 percent Capital Gains Tax on any stock that has appreciated in value that you have held more than 12 months by donating it to the Scottish Rite Foundation. This provision applies to all gifts of stock made on or after January 1, 2002. For example: if you purchased stock years ago for $1000 that is now worth $5000, an outright gift of the stock would result in a tax deduction of $5,000 (assuming you can itemize). Additionally, you would also avoid paying the 20 percent Capital Gains Tax on the $4,000 appreciation, and realize an additional tax savings of $800.

For income tax purposes, you may deduct up to 30 percent of your adjusted gross income for the value of such gifts, and you have an opportunity to carry over any excess deduction for an additional five years. Consult your tax professional for information on how deductions can be most beneficially applied to you.

You may ask, what if a stock has decreased in value but you would still like to make a contribution to the Foundation. Since it is still beneficial to you, as a taxpayer, to claim a capital loss, you would be better off selling the stock and making a cash contribution from the sale proceeds. For tax purposes, you could claim both the loss and the charitable deduction for your gift.

You can also make a gift with your shares of mutual funds. Please call Wilbur Smith at the Scottish Rite office (216) 432-2370 for more details.