Want to leave a legacy gift and get a pretty significant tax benefit? If so, you should check out the Endow Iowa program. This is how it works:
- The donor either makes a gift to an Endow Iowa Agency Fund or to their own Endow Iowa Donor Advised Fund. An agency fund is just a pre-existing fund specific to one Iowa-based charity. The donor advised fund is not tied to one specific charity and allows the donor to decide where the annual distribution from the fund goes.
- Once the donation is placed in one of the two funds above, the donor receives the normal federal itemized tax deduction and a 25% state of Iowa income tax credit. So, if you made a $1,000 donation to an Endow Iowa fund and your marginal tax rate is 30% You would reduce your federal income taxes by $300 and your state taxes by $250 for a total tax benefit of $550, making the cost of the gift only $450.
- The catch is that you can only distribute 5% of the balance each year, and only to Iowa charities.
The kicker is that there are a limited number of tax credits available each year, and as of October 14th, that number is down to approximately $590,000. If you are interested in making a gift to an Endow Iowa Fund, contact us at Foster Group and we can assist in coordinating and answer additional questions. For more information on Endow Iowa visit Community Foundation of Greater Des Moines.
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