morgan 10-27

Through charitable gift-giving, you can show appreciation to charities you admire while receiving tax savings and other benefits. To help you start thinking about developing a strategy, here is some general information about philanthropic gift-giving.

Most charitable gifts also provide you with a current year income tax deduction. There are several types of charitable beneficiaries, including public charities, pooled income funds, private foundations, donor-advised funds and charitable remainder trusts.

One effective and popular choice for individuals who wish to leave a lasting legacy to their favorite charity but also reap various financial benefits is the charitable remainder trust. In exchange for a future gift to charity, the charitable remainder trust provides you with several major tax and economic benefits. A charitable remainder trust allows you to:

c defer capital gains taxes;

c increase diversification and cash flow;

c receive a current-year federal income tax deduction; and

c reduce future estate tax liabilities.

Remember, a charitable remainder trust is irrevocable. Assets in the trust eventually pass to charity, not to your family. You should work with your tax and legal advisers so that a charitable remainder trust, or any other gift-giving strategy, fits into your overall estate plan. If it does, you could potentially enjoy significant tax and economic benefits as well as leaving a lasting legacy to your favorite charity.

Morgan Stanley does not render advice on tax and tax accounting matters to clients. This material was not intended or written to be used for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. This article is published for general informational purposes and is not an offer or solicitation to sell or buy any securities or commodities.

Stephen Bobko-Hillenaar, Taylor Easley and Dale Suezaki are financial advisers at Morgan Stanley, 329-7979.