Frequently Asked Questions

1. What are the assets I can use to make a gift to The American College?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property).

Upon your death you can make a gift through your will or with a distribution from a retirement plan or life insurance policy.

You also have the option of making a gift that returns lifetime income to you, your spouse, or other individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.

2. What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the form of the gift, the time at which it is made, whether it is outright or deferred or made in consideration of income payments. In general, though, here are some guidelines:

• Outright gifts to The American College 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.
• Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however.
• Similarly, life insurance distributions to the College 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.

3. I want to set up a life insurance policy, name The American College 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.

4. 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 point—by your estate and your heirs…unless contributed to charity (as a result of its non-profit status). In other words, by making a gift of retirement assets to charity you are, in essence, receiving double benefits. Your estate and heirs will not be taxed on the portion that goes to charity and you will support causes important to you!

5. I’ve heard that transferring gifts of retirement-plan assets to charity is 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 point—by 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 the College!

6. 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 The American College, 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.

7. If I create a bequest or life-income gift, will you continue to ask me for annual contributions?
That’s a good question. Please remember that we will, because the commitments address two different needs. Your planned gift is a significant addition to our long-term financial strength -- our ability to meet the challenges and opportunities the future will bring. However, today's efforts are supported through your annual gift. We are grateful that you want us to be a force for good both today and in the future.