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Gone Fishing
Gifts of Stock — Gift Annuity
For many years, they had talked about taking part of their stock value and putting it toward a lake home.
Gene and Carol purchased stock in a small medical service company several years ago. The company had done well and a larger company was thinking of buying it. “We were fortunate to invest in the medical service company,” Gene said. He explained that over the years, medical services have become more and more important, especially for senior Americans.
“We thought this stock would grow and, indeed, it has increased in value,” Carol said. “We paid about $50,000 for the stock and it is now worth $400,000. If we were to sell the stock, we would pay a large tax.”
Gene and Carol are avid fishers. They own a boat and keep it in a boathouse that belongs to their friends. During the summers and as many weekends as possible, they drive to the lake. They love the community of friends they have developed there. For many years, they had talked about taking part of their stock value and putting it toward a lake home.
“We had our eye on a very nice summer cottage,” Carol said. “The price was going to be approximately $120,000. So we had a dilemma. How could we take $120,000 in cash from the value of the stock and not pay tax?”
They checked with their CPA to get his suggestions. Knowing that Gene and Carol were very involved in their Episcopal Church, he advised them to contact Episcopal Relief & Development about planned giving options.
“We were happy to discover that we could transfer $280,000 worth of the stock into a special trust — a unitrust. When we transferred the stock into that trust, it was then sold tax-free,” explained Carol. “Best of all, we were able to sell the other $120,000 of the stock for cash. The deduction on the charitable trust saved enough in tax so that we did not have to pay tax on the $120,000. The full $120,000 was available and we could purchase our lake home.”
“This was a wonderful agreement,” Gene concurred. “I am pleased that we were able to set up the trust. We now have income from our unitrust, we are enjoying our new home, and we love having the opportunity to go fishing whenever the mood strikes.”
To learn about how a unitrust could benefit your financial situation, please contact us today.
