March eRate: Gifts of Appreciated Securities in Today's Economy

Gifts of Appreciated Securities in Today's Economy

We noted 2019’s phenomenal stock market performance in the February 2020 edition of PG Calc’s eRate newsletter. The S&P 500 Price index returned 33.07% in 2019 if you include dividend reinvestment. Stock in Axsome Therapeutics, the maker of the common anti-depressant Wellbutrin, gained an astounding 3,578%!

Headlines in the financial press range from “Heading for A Slowdown: 2020 U.S. Economic Outlook” to “U.S. Economy Heads Into 2020 With Steady Growth.” In these uncertain times, both statements can be true. Forbes magazine concluded, “…whether or not we see a crash in 2020 is impossible to say, but there is a risk that market returns, especially for the U.S., are a lot less good for the next few years, than we’ve seen in recent history.” Ultimately, it doesn’t matter where any of us think the economy is heading, rather, we need to know what our donors think.

In this month's featured article, Jeff Lydenberg, PG Calc VP of Consulting, discusses market performance and gifts of appreciated securities.

UPCOMING WEBINAR

Calming Troubled Waters – Getting IRA Death Proceeds in a Timely Manner

Presented by
Johni Hays

Thursday,
February 27
1:00 - 2:30 pm ET

UPCOMING TRAINING

Planned Giving Manager

April 20, Atlanta, GA

May 6-7, Boston, MA

May 26-27, Costa Mesa, CA

GiftWrap

March 11-12, Cambridge, MA

Quick Tip: Email Options in PGM Anywhere

PGM Anywhere can export presentations in PDF format, making it easy for you to attach them to an email you create in your email software. This approach is highly flexible and reliable, but requires a couple of steps and for you to compose the email.

email_icon Alternatively, you can email presentations directly from PGM Anywhere by clicking the email icon while viewing your presentations. With this one click, PGM Anywhere will create an email with default text and your presentations attached. Just enter “To” and “CC” addresses, edit the text, as needed, then click Send. To address the ever-tightening security of email software, the latest release of PGM Anywhere lets you email presentations this way using either the Client domain or PG Calc domain.

Choose Customize > Chart Options
Select the domain for "Emails from Results and Tools should be sent using."

Choose Client domain, the default selection, to have PGM Anywhere send emails using the email address assigned to your login. The advantage of using this address is that the "From" address ordinarily will be your email address. The disadvantage is that these emails are more likely to be rejected by the receiver's email software as spam than if you use the PG Calc domain (see below). In some cases, your IT department may be able to configure your email system to improve delivery. PG Calc is happy to assist your IT staff with this work, as needed.

Choose PG Calc domain to have PGM Anywhere send emails using “presentations@pgcalc.com.” The advantage of using this address is that fewer receiving email systems will reject PGM Anywhere's emails than if you use the Client domain. The disadvantage is that the recipient may see one of the following “From” addresses: "presentations@pgcalc.com on behalf of [user's email address]" or "[user's email address] via presentations@pgcalc.com.” It will depend on the user’s email software.

IRS Form 8283 Revised for 2018 Regulations

The IRS has released a revised version of Form 8283, Noncash Charitable Contributions. The new form and instructions reflect changes made in the new regulations that were published in July 2018 and took effect on January 1, 2019. The IRS also revised IRS Publication 561, Determining the Value of Donated Property.

Donors completing Form 8283 Section A for their 2019 income tax returns should use the new form. But what about donors who made gifts in 2019 who received a signed Form 8283 Section B from their appraiser and donee charity before the new form was available? The new form does have revised wording required by the new regulations for the Declaration of Appraiser in Form 8283 Section B Part III.

While it would seem reasonable that the IRS will accept the version of the form that was available when the appraisal and Form 8283 was signed, that question is not addressed in the IRS instructions for the new form, so professional tax advice may need to be sought, especially for large gifts.

Charities now being asked to sign the Donee Acknowledgement in Form 8283 Section B Part IV should check that the form has “Rev. November 2019” in the upper left corner. The previous “Rev. December 2014” version is obsolete for gifts now being appraised and acknowledged.

PG Calc offers a qualified appraisal service for an early termination of a planned gift in favor of the charity needed when the charitable deduction is over $5,000, and in situations where an appraisal is desired for a remainder interest over $5,000 in a new planned gift. Our appraisal service has been revamped for the new form and regulations.

PGM Anywhere Update Released on January 16

On January 16, PG Calc released the latest update of PGM Anywhere, our online gift planning software. This latest release includes:

An option for improving email delivery of presentations to donors (see Quick Tip above)
Expanded security features, including encryption-in-place of all case data
Better alignment of charity name in diagrams
Improved heading behavior in Designer Proposals
Bug fixes

If you are a PGM Anywhere client, you can learn complete details of what’s new by clicking the Release Notes link on the PGM Anywhere login screen.

Reminder: Important Dates Remaining for 1099-Rs

By now you have sent the 1099-R forms for 2019 to all of your annuitants, and you likely are receiving back a few of them for incorrect addresses and other reasons. Once you have updated all of your records and sent out all of the corrected forms, you will need to submit the information to the IRS. There are two different methods and two different deadlines for that process.

If you are filing the 1099-R information for fewer than 250 annuitants, you may choose either the paper filing method or the electronic reporting process. The deadline for filing paper copies is February 28, and the deadline for electronic reporting is March 31. If you are filing the information for 250 annuitants or more, you may only file the information electronically.

We cover all of this information – and so much more! – in our “2019 Year End and 1099-R Tax Information for GiftWrap Clients” document, which was sent to all GiftWrap clients on December 11. If you would like to receive the email message and URL again, please contact us at 1-888-474-2252 or support@pgcalc.com.

Reach Out with QCD Marketing

The passage of the SECURE Act provides a timely opportunity for nonprofits to talk to donors about the advantages of making gifts of retirement assets, specifically the Qualified Charitable Distribution (QCD). Recent changes in the laws governing retirement plans have made QCDs newsworthy again, and in a good way. QCDs remain an attractive gift option for your donors.

We recently sent the attendees of our free PG Calc webinar on the SECURE Act a donor-facing article for use in QCD marketing campaigns. If you did not get a copy, not to worry - you can get it here: The Secure Act and the QCD.

In addition, we recently launched a special offer for our Marketing Services. If you sign up for a PG Calc Marketing Services website before April 15th, we will waive our $950 set-up fee. Contact Dave Wolfe at 888-497-4970, or sign up now for a Marketing Services demo today, and see how PG Calc can enhance your planned giving marketing program, while giving you the gift of time.

Remember, this offer is only good until April 15th.

Brad Bedingfield, of Hemenway & Barnes, Finds the CGA Manual Indispensable

Brad Bedingfield is a partner at the law firm of Hemenway & Barnes LLP, where he is Chair of the Nonprofit Group. His practice concentrates on representing tax exempt organizations, including representing numerous large institutions around the country on charitable giving and legal compliance in their fundraising efforts. Among his areas of focus are planned and major gift policies and procedures, tax and trust law, and multi-state compliance.

Brad has found that charitable gift annuities, in particular, are a common vehicle for donors to support their favored institutions while ensuring a regular stream of income. However, he notes that the tax rules for CGAs are extremely complicated, and can easily lead to mistakes. In addition, Brad observes that state insurance laws often regulate CGA sales, and can present considerable institutional risk if not carefully navigated.

As a PG Calc client, Brad has been making extensive use of PG Calc’s Charitable Gift Annuities: The Complete Resource Manual (CGA Manual) in his planned giving client engagements. Brad had this to say about PG Calc’s CGA Manual:

“I have access to several databases for researching tax rules and multi-state compliance, but when it comes to charitable gift annuities, there is nothing on the market that comes close to the depth of information and user-friendliness of PG Calc’s CGA Manual. I use this resource as a primary tool for reviewing tax and legal questions pertaining to CGAs. I see a lot of complex CGA scenarios, but have yet to find one with respect to which the CGA Manual did not have some helpful insights – even arcane scenarios are often discussed expressly, with references to the key primary sources. On a practical level, the inclusion of sample forms for various types of CGAs, and in various jurisdictions, is a godsend, and saves both me and my clients an incredible amount of time. The CGA Manual is unique and indispensable."

Learn more about Hemenway & Barnes.

Learn more about PG Calc's CGA Manual.

PG Calc 129 Mount Auburn Street Cambridge MA United States

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