The CARES Act
Like you, New England Conservatory is adapting and changing in response to the COVID-19 pandemic and accompanying economic uncertainty. New England Conservatory is grateful for your generous support of our work over the years. As we adapt to our new reality, we would like to bring to your attention new tax rules for charitable giving included in the recently enacted Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
You may deduct gifts of cash to most public charities to offset as much as 100% of your income! For the 2020 tax year only, you may deduct cash contributions to New England Conservatory and most other public charities to offset up to 100% of your income. Ordinarily, the income tax charitable deduction for cash gifts is limited to 60% of your income. This 100% limit allows especially generous donors to reduce their 2020 federal income tax to zero. If you are even more generous, you can carry forward unused cash contribution deductions for up to five years. Contributions to donor advised funds or supporting organizations are not eligible for this deduction. Your ability to deduct up to 100% of your income with cash gifts is reduced by your gifts of appreciated assets such as publicly traded securities and real estate for example. That means your charitable deductions in 2020 cannot exceed 100% of your income, but you may be able to carry unused charitable deductions forward to future years.
It may not be the tax-wise choice to deduct up to 100% of your income. Because federal income tax rates are progressive, it is not a given that it will be to your advantage to deduct 100% of your cash contributions in 2020. Check with your financial or other advisors to determine whether the 100% deduction makes sense for your specific circumstances.
If you don’t itemize you may reduce your taxable income by $300 for your charitable contributions in 2020. If you do not itemize your deductions in 2020, you can still reduce your taxable income by up to $300 for contributions of cash to public charities using an “above the line” adjustment to reduce your taxable income.
Required minimum distributions from retirement plans are waived for 2020. Most required minimum distributions from retirement plans have been eliminated for 2020. Check with your financial advisor to see how this temporary rule will apply to you. Minimum distributions that have already started are still required from some defined benefit pension plans, but some required minimum distributions that would have started in 2020 may not have to start until 2021.
Qualified charitable distributions are still a great way if you are 70½ or older to make contributions. If you are 70½ or older, a qualified charitable distribution (“QCD” or “IRA charitable rollover”) allows you to make a tax-free gift of up to $100,000 to NEC from your IRA. While the benefit of using a QCD to satisfy your required minimum distribution has been waived for 2020, a qualified charitable distribution remains a great way to make tax advantageous contributions, especially if you don’t itemize your deductions.
The CARES Act, which was necessary to address the far-reaching effects of the COVID-19 pandemic, provides additional tax incentives to encourage charitable giving. You have important priorities for your family and loved ones, and we know that their health and financial well-being comes first. When you are ready, we will be here to help you shape a charitable gift plan that suits your needs and allows you to keep helping with our important work. Please contact Aaron McGarry at aaron.mcgarry@necmusic.edu or call 617-585-1356 to learn about the many ways you can support New England Conservatory.
Additional Giving Options
By making a planned gift, you can strengthen NEC and gain financial and tax benefits for you and your family. For more information, please contact Aaron McGarry, Planned Giving Officer, by email or by phone at 617-585-1356.
Real estate can be contributed as an outright gift or to finance a planned gift. Available options include a retained life estate, which allows the donor to continue to use the property for a certain number of years, or for the donor’s lifetime. Other arrangements offer special tax advantages and lifetime income.
Gifts of real estate include undeveloped land, a residence, a vacation home, a farm, or commercial property. NEC requires the donor to bear certain costs when making a real estate gift, such as an appraisal to determine the fair market value. Also, NEC deducts transaction costs from the proceeds of the sale of the property, including the closing costs, title insurance, a survey (if needed), and any taxes due before the gift is completed.
For any questions about gifts of real estate, please contact Abigail Smitka, Assistant Vice President of Major Gifts and Campaigns, at as3628@necmusic.edu or (617) 585-1719.
Many companies support the philanthropic interests of their employees by matching employee contributions to nonprofit organizations like NEC. If your employer offers a matching gift program, you may be able to double or even triple your gift!
For more information on matching gift contributions, please contact Cheryl Fries, Assistant Director of Advancement Operations, at cheryl.fries@necmusic.edu or (617) 585-1373.
Gifts of personal property, such as musical instruments, recordings, and scores provide valuable support for our music education programs. Through the support of in-kind gifts, you can help NEC meet the college’s ongoing need to expand its inventory — and you qualify for a tax deduction.
NEC accepts in-kind donations on a case-by-case basis. For more information, please contact Patricia Kopko, Director of Advancement Operations, by email or phone at 617-585-1225
Friends of NEC may elect to make gifts to commemorate a loved one’s life, birthday, anniversary, or other special occasion. We will gladly notify those you wish to know of any gifts made in their honor.
Contributions in any amount may be directed to The NEC Fund, or to the area of your choice. Please note the name of the person you wish to commemorate when you make your gift.
Contact Us
To learn more about how you can support NEC, please contact Cheryl Fries, Assistant Director of Advancement Operations, at cheryl.fries@necmusic.edu or (617) 585-1373.
New England Conservatory is a 501(c)3 non-profit organization. All donations are tax deductible to the full extent of the law. Our non-profit tax ID is 23-7225104.
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