Making the Most of the Market

Ed ChaplineThe stock market has had a remarkable run the past few years, leading many investors to wonder whether it might be time to sell some of their holdings. Another option for charitably minded alumni and friends? Transferring their hot stocks to the Naval Academy Foundation to make a tax-advantaged gift in support of the Brigade of Midshipmen.

Gifts of appreciated securities which have been owned long-term (more than one year and one day) receive a current year tax deduction for the fair market value of the gift, and may eliminate the capital gains tax liability on the sale of the asset. Donors can make a gift at a lower cost than writing a check, or they can make a bigger gift than they might have thought possible.

Ed Chapline '48, who is married with three adult children, began making contributions in support of the Academy about 25 years after his graduation, as his participation in other forms of alumni engagement, including reunions and football games, increased.

"Sometimes the further you get away from a place, the more you realize how much you love it," Chapline says.

He has been a President's Circle donor since the 1995 inception of the Naval Academy Foundation's leadership giving society and is also a member of the Robert Means Thompson Society, which recognizes those who have included the Naval Academy Foundation in their estate plans and through life-income gifts.

Chapline is a strong advocate of using a variety of instruments for charitable giving. Many of his personal contributions to the Naval Academy have come via transfers of appreciated stock.

"A substantial portion of our charitable gifts are of appreciated stock. It's basically discounted money—it's worth more than I originally invested in it, and I can save on the capital gains tax I would owe if I sold it outright. And if donors want to retain their position in the donated stock, they can buy additional shares at a higher tax basis with the funds saved through their reduced capital-gain taxes," he says. "A lot of people may not realize giving this way is an option. It can even be easier to ask their broker to execute a stock transfer than to write a check to an institution directly."

To receive a current year income tax deduction, alumni are encouraged to make gifts of stock by the middle of December to allow time for transfers to be completed by year end. Instructions for making gifts of appreciated stock are available on the Foundation website, or by calling Dawn Beach at 410-295-4115.

 
 

© United States Naval Academy Alumni Association & Foundation

 
 
 

A charitable bequest is one or two sentences in your will or living trust that leave to the United States Naval Academy Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to the United States Naval Academy Foundation, a nonprofit corporation currently located at 274 Wood Road, Annapolis, Maryland 21402, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the Naval Academy Foundation or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the Naval Academy Foundation as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the Naval Academy Foundation as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the Naval Academy Foundation where you agree to make a gift to the Naval Academy Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

Personal Estate Planning Kit Request Form

Please provide the following information to view the materials for planning your estate.

eBrochure Request Form

Please provide the following information to view the brochure.