Methods of Giving

An outright gift of real property made to Mississippi State may provide a donor with an income tax charitable deduction equal to the property’s full fair market value, provided the property has been held for more than one year. This deduction allows a donor to reduce the cost of making the gift and frees cash that otherwise would have been used to pay taxes.

By donating the property to Mississippi State, a donor may also avoid capital gains tax on the property’s appreciation. Furthermore, the transfer isn’t subject to the gift tax and the donation reduces the taxable estate.

A person may make a bequest to Mississippi State University through a will. Because a will is revocable (it may be changed at any time during a person’s life), a donor cannot take an income tax deduction, but the property will not be taxed as part of the estate. Through a will, a donor also may give another person life use before unrestricted ownership passes to Mississippi State.

The MSU Foundation encourages a donor to notify our office if considering including Mississippi State as part of their estate plans.

When creating a charitable gift annuity, a donor may transfer assets of real estate or timberland to Mississippi State in exchange for a contract to make payments to one or two beneficiaries for life. The donor receives an immediate income tax deduction and may receive a portion of each annuity payment free of income tax. (Charitable gift annuities are not available to residents of all states.)

A donor may use unmortgaged property to fund a qualified charitable remainder trust. Once the property has been transferred to the trust, the trustee can then sell it and invest the proceeds in income-producing securities, which become the source for lifetime income payments to the donor and any other recipient named by the donor. When the trust terminates, Mississippi State will receive the remainder in the trust. This strategy avoids estate taxes when spouses are the only income beneficiaries. Lifetime benefits include a charitable income-tax deduction and the avoidance of up-front capital gains tax.

By deeding a personal home to Mississippi State now, a donor may still obtain valuable tax savings. This arrangement is called a retained life estate. Even though the MSU Foundation would not take possession of the residence until after the lifetimes of the donor or tenants named by the donor, the donor would receive an immediate charitable income-tax deduction because the gift cannot be revoked. The amount of the deduction depends upon the value of the property, the donor’s age, and the age of any other person given lifetime use of the property.

With this kind of gift, a donor retains all the rights and responsibilities of ownership such as maintenance, taxes, improvements, and insurance – other than disposing of the property after death. In other words, a donor may continue to live as in the residence with no interference or may even rent the property and collect the income.