You may be eligible to support Cincinnati Ballet by donating appreciated property. Please contact the philanthropy team for more information.
Should a donor receive a large bonus or begin to draw on a deferred compensation plan in retirement, they may see significant income tax ramifications in the year that the benefit is received. Donors can support Cincinnati Ballet’s mission and realize substantial charitable deductions in their High-Income Year by:
Upon retirement, donors with significant Individual Retirement Account (IRA) balances are required to take minimum distributions from their account. These distributions count towards the donor’s yearly taxable income, which could push them into a higher income tax bracket and/or prevent phaseouts of other tax deductions.
Because of this, some donors choose to make Qualified Charitable Distributions (QCD) to a 501(c)(3) nonprofit organization. A QCD allows individuals who are 70½ years old or older to donate up to $100,000 total to one or more charities directly from a taxable IRA instead of taking their required minimum distributions.
For donors looking to leave a legacy gift, designating Cincinnati Ballet as a beneficiary of an Individual Retirement Account (IRA) brings several benefits:
This is also a very flexible option because any percentage of the donor’s IRA can be directed to a charity with the remainder directed to the donor’s heirs.
Several charitable trust options are available to donors and may be beneficial to those with estate/gift tax issues. Whether a particular option meets a donor’s tax and charitable goals varies and requires detailed analysis from the donor’s advisory team.
A charitable lead trust (CLT) is an irrevocable trust that provides financial support to one or more charities for a period of time, with the remaining assets eventually going to designated beneficiaries.
A charitable remainder trust (CRT) is an irrevocable trust that generates a potential income stream for the donor or their designated beneficiaries, with the remaining assets going to one or more charities.
Donors who own a family business have two main options to benefit Cincinnati Ballet as part of a business succession plan. Both strategies are complex, so donors interested in these options should work closely with qualified advisors.
For those business owner donors expecting to sell the company to an outside buyer, the business owner may choose to donate some portion of their interest in advance of a sale such that Cincinnati Ballet can also participate as a seller. This can significantly reduce the donor’s income tax owed in the sale year.
For those business owner donors that desire to sell the business to children or key individuals in the company, the business owner may choose to obtain a tax deduction based on the appraised value of the business interest. This would entail donating some portion of the donor’s interest to Cincinnati Ballet or a fund created to support Cincinnati Ballet. The donor’s children could then buy back such shares at their appraised value.