Frequently Asked Questions
2. What sort of gift plans also return income to me?
You have the option of making a gift that returns income to you, your spouse, or other individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.
3. What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the type of gift, the time at which it is made, whether it is outright or deferred or has any income payments. In general, though, here are some guidelines:
- Outright gifts to generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains -- a great tax benefit!
- Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to our mission. We can advise you on this point. Click here for contact information.
- Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax.
- Similarly, life insurance distributions to are not income-tax deductible, but are exempt from estate tax. If you have made us the irrevocable owner and beneficiary of a policy during your lifetime, you may deduct annual gifts that offset premium payments (for more details on this point, see Question 4 below).
- The charitable deduction for a gift that returns income to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.
4. I want to set up a life insurance policy, name 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. We must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
5. I’ve heard that transferring gifts of IRA assets to charity are advantageous. Why?
Qualified retirement plans such as IRAs, 401(k), 403(b), and Keoghs allow individuals to defer paying taxes on a portion of their income until the assets are withdrawn during retirement years. However, after a person's death, these accounts are often exposed to income and estate taxes, at a combined rate that could rise to 75% or even higher on large taxable estates. The tax will be paid at some pointby your estate and your heirs unless contributed to charity. In other words, by giving retirement assets to charity you receive double benefits. Your estate and heirs will not be taxed on the portion that goes to charity and you will support !
6. I'd like to donate a painting. Will you determine its value for my income tax deduction?
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.
7. I'm interested in establishing a charitable gift annuity. What financial provisions will you make for the income payments to me and my spouse?
Your charitable gift annuity will be treated as a general obligation of , backed by all of our assets. We have an unbroken record in making timely payments to our annuitants, and that ongoing responsibility is a key element in our financial policies.
8. If I create a bequest or life-income gift, will you continue to ask me for annual contributions?
Your planned gift is a significant addition to our long-term financial strength and our ability to meet the challenges and opportunities the future will bring. However, today's efforts are supported through annual gifts and we greatly appreciate and encourage any annual support you may want to consider.
Frequently Asked Questions (For Professional Advisors)
- What is the Federal tax identification number for the American Red Cross?
The federal tax identification number is 53-0196605.
- Can the American Red Cross serve as Executor for an estate?
The American Red Cross National Headquarters and local Red Cross Chapters cannot serve as Executor for any estate due to potential liability and conflict of interest issues.
- Can the American Red Cross serve as Trustee of a charitable trust?
In certain instances the American Red Cross, through its National Headquarters, can serve as trustee. Local Red Cross Chapters and other operating units are not authorized to serve as trustee. The American Red Cross may serve as trustee at the request of the donor if:
The contribution of cash or marketable securities to the trust is of appropriate value, usually a minimum of $150,000; and the trust provides for an irrevocable remainder interest to the American Red Cross of 100%.
ORThe contribution of cash or marketable securities to the trust is of appropriate value, usually a minimum of $250,000; and the trust provides for an irrevocable remainder interest to the American Red Cross of at least 50%.
ORThe contribution of real estate to the trust is of appropriate value; usually a minimum of $250,000 and the donor agrees to serve initially as their own trustee. The American Red Cross will then be named the successor trustee of the trust once the property has been sold.
- What are the ways in which a donor can designate their gift to the American Red Cross through their will?
A donor can bequeath a sum certain or a percentage of their estate for either specific or general purposes. The gift can be designated to the American National Red Cross and/or a local American Red Cross Chapter.
- How can I notify an American Red Cross Chapter about an estate gift?
You can either contact the Red Cross Chapter directly, or, if you are unable to locate the Chapter, Type your zip code in the “Find Your Local Red Cross” chapter search engine on the left of the this page.
You may also notify our legal office at the following address:
American Red Cross
2025 E Street NW
Washington, DC 20006
Attn: Renee Seager, Estate Specialist
- Who can answer the bequest and legacy questions of an executor/trustee?
Please direct inquiries to Renee Seager, Estate Specialist, at (202) 303-8316 or email@example.com.
- Is the American National Red Cross and the local Chapters of the American Red Cross separate legal entities?
No. The American Red Cross is one legal entity. It is a tax-exempt organization under section 501 (c) (3) of the Internal Revenue Code. The federal tax identification number is 53-0196605.