Truth and Freedom for the Future...
with Effective Gift and Estate Planning Today
Long considered the ultimate "win-win" charitable gift,
"planned giving" vehicles offer income and tax saving
benefits in return for an irrevocable commitment of cash,
securities, or real estate to the MRC.
A Tribute to
In mid-May, an envelope arrived at the Media Research Center from a Connecticut law firm. Inside was a letter, informing us that a dear friend and supporter, Mr. Harry G.A. Segerman, who had passed away in May of 2001, had made a special provision in his will for the MRC. Along with that letter was a check for $500,000.
For questions, or to make a donation over the phone, call
Thom Golab at (703) 683-9733 or (800) 672-1423.
Letter from the President
Many people are concerned with
what they can do to make the world a better place for generations to
come. Liberals are most concerned with how the government can
gain more control and more taxes; Conservatives are most concerned
with reducing the amount of government, lowering taxes, and
upholding the individual freedoms and values on which this country
course, its no surprise which side the national media support.
From their brazen protection and promotion of Bill Clinton over the
eight years he was in office to their attempts to get Al Gore
elected as President in 2000 - the liberal media have proven they'll
stop at nothing to advance their agenda.
Now their campaign is to derail the agenda
of George W. Bush, the "selected" President, by their
continued efforts to undermine the conservative
Movement's Best Defense
Before the MRC was established in 1987, conservatives had virtually
no voice in the so-called "news" media, and virtually
nowhere to turn to debunk and neutralize the liberal political
agenda in the press.
But now, after years of consistent
documentation and impeccable research, the MRC has established
itself as the movement's most vital tool and resource - the proof
conservatives need to combat and counter the liberal media's efforts
to bury, distort, or blatantly ignore any news that is unfavorable
to their own leftist agenda.
And the MRC has lead the charge. By
relentlessly exposing the media's leftist political agenda for all
America to see, the MRC has succeeded on two fronts. First, as
numerous surveys document, the public now knows the political
agenda of the press. Second, the public is turning to new
alternatives; liberal organizations are losing millions of viewers
and readers while new alternatives are flourishing everywhere.
We must be realistic, however. The left never sleeps, and it
will continue its attempts to influence public opinion through the
media for generations to come.
What can you do to leave the world a better
place? Help ensure that the most vital organization - the
Media Research Center - is still flourishing, still on mission, as
the "checks and balances" on the liberal press for
generations to come. By including the MRC in your estate plans
today, you are making a powerful testament about your desire to
preserve the truth and the values that have made this country
I invite you to call our Office of Gift and
Estate Planning to speak with one of our knowledgeable professionals
who can help you explore how you can increase your income, reduce
taxes, protect your your estate, and create a legacy at the MRC
through a variety of gift planning options.
L. Brent Bozell III
vs. Planned Giving
For most people,
the easiest and most convenient gift arrangement is an outright gift
of cash or long-term property to the Media Research Center.
You, as the donor, would receive a charitable contribution deduction
for the full fair market value of the gift.
funded with cash or appreciated assets, offer the following benefits
to the donor:
An increased income stream to
the donor or selected beneficiaries;
An immediate charitable
The ability to completely
bypass or reduce potential capital gains taxes for gifts of
A reduction of potential
estate and/or gift taxes; and
The opportunity to establish a
lasting legacy at the Media Research Center
Assets Used for Outright and Planned Gifts
Simplicity and ease of delivery make
cash the most common type of charitable gift. The gift is
considered made on the date delivered or mailed (by credit card when
charged, even though paid later). Generally, such gifts are
deductible to the extent of 50% of your adjusted gross income
(income for tax purposes before itemized deductions and personal
exemptions); any excess can be deducted over the next five years,
subject to the same 50% limitation.
Appreciated Property. The
deduction for gifts of appreciated property you may have held for
more than one year is normally equal to the fair market value of the
property donated. If you have held the property for less than
one year, your deduction is limited to your cost basis (what you originally
paid for the property).
These gifts are generally deductible to the
extent of 30% of your adjusted gross income. Any amount not
currently deductible because of such a limitation, however, may be
carried forward and deducted over the following five
Property. Conversely, if you are considering a
contribution of property which has decreased in value since
acquisition, you can only claim a deduction for the property's fair
market value. Thus, you should first sell the property
and then donate the proceeds, thereby establishing a loss for tax
purposes (available to offset other gains) while entitling you to
the same deduction you would receive if you donated the property.
Requirements. These rules, which affect all significant
gifts of property, except publicly traded securities, are discussed
in the section covering gifts of real estate.
Securities may be given either by transfer of the certificate of
ownership or through account transfer arranged with your
broker. In either case, you avoid or reduce the tax on any
potential capital gain and receive an immediate charitable
TANGIBLE PERSONAL PROPERTY
Gifts of equipment, books, gems,
artwork, etc., are deductible (within percentage limitations
discussed above) to the extent of full value, as long as the
property may be used in the furtherance of the exempt purpose (i.e.
grassroots education, media related activities) of the Media
Research Center. Thus, if the use of the donated property is
unrelated to the MRC's tax-exempt purpose, such as a coin collection
given for resale, the deduction is limited to the donor's cost
basis. If you are the creator of the gift, however, as in the
case of a donation of a painting by the artist, the deduction is
limited to the cost of the producing asset.
See separate section dealing with
gifts of real estate.
employers will match your gift one-for-one or even two-for-one,
providing additional support for the Media Research Center.
Often these programs are extended to retirees. For additional
information on matching gifts, contact the employee benefits office
at your place of employment.
a Legacy for the Media Research Center
the Media Research Center in your estate plans accomplishes the
following worthwhile objectives:
provides a significant legacy that will help provide the
resources necessary to enable the MRC to continue its battle
against media bias, generate more grassroots action across the
country, and to operate its Internet news wire;
reduces your estate tax burden by providing a charitable
deduction equal to the value of the bequest at the time of your
ensures that your assets are distributed in accordance with your
are provisions made in your Will or Living Trust that specifically
set forth the portion or actual dollar amount that you wish
transferred to the MRC after death.
This is a gift that is payable from
the general assets of your estate. The usual general bequests
directs that a certain sum of money be paid to the Media Research
This gives a particular item of
real or personal property to the Media Research Center.
This provides the Media Research
Center with the remainder of your estate after all of your debts,
expenses, and taxes have been paid and all general and specific
This makes the Media Research
Center a beneficiary of your estate only when designated
beneficiaries fail to survive you.
BEQUEST BY CODICIL
If you already have a Will and you
wish to make a bequest to the Media Research Center without
rewriting your entire Will, a Codicil can be drawn by your attorney
to accomplish this goal.
GIFT OF RETIREMENT ASSETS
Because of the unfavorable tax
consequences of giving tax-deferred assets (e.g. 401 (k), 403 (b),
SEP, and IRA) to children or other non-spousal individuals, these
assets are particularly good candidates for outright charitable
giving. You may simply name the Media Research Center as the
beneficiary of this account on the form provided by your retirement
account manager. At your death, your estate will receive an estate tax charitable contribution deduction
for the value of the retirement assets donated to the MRC.
you have determined the type of bequest you wish to make, you should
consider making further provisions that indicate how you want your
bequest to be used by the MRC. There are two categories of
This form of bequest specifically
is intended to support the overall work of the MRC and will be
utilized at the discretion of the MRC Board of Directors
This form of bequest specifically
directs the Media Research Center to use the funds in a particular
way for a particular purpose. This designation can be made to
any function or need of the MRC.
It is recommended that you consult with the
MRC staff if you wish to make a restricted bequest to ensure that
the specific purpose can be accomplished.
All of the above examples and suggested
language are provided by the Media Research Center for informational
Please consult your legal counsel for more
Charitable Gift Annuity is a combination of a gift and an
investment. In exchange for a gift of $5,000 or more (either
in the form of cash or readily marketable securities), you will
receive a fixed sum on a regular basis from the Media Research
Center throughout your lifetime.
The benefits you receive from a gift annuity
Guaranteed life income -- a
portion of which is tax-free;
Capital gains tax savings;
Estate tax savings; and an
Immediate gift to the MRC of a
portion of your gift.
payout is based on the age(s) of the annuitant(s), with older donors
receiving a higher payout than younger donors.
Gift annuity rates are established by the
American Council on Gift Annuities. In determining these
rates, it is assumed that one-half of the initial contribution will
be allocated to the repayment of the annuity and one-half will be
treated as a charitable gift.
You can claim a
charitable contribution deduction in the year of the gift for the
portion of the gift's value which exceeds the value of the annuity
you receive. You may also specify how your gift will be used
by the Media Research Center.
For a gift of
cash in exchange for a charitable gift annuity, you would receive a
lifetime income stream (based on the stated rates) as well as a
charitable contribution deduction. This income stream would be
classified as ordinary income and tax-free return of
principal. If you outlive your actuarially-determined life
expectancy, the entire income stream would be taxed as ordinary
By making gifts
of appreciated securities to the annuity program, you can reduce any
potential long-term capital gain tax which would be due upon
outright sale of the asset. The total capital gain is split
into two parts: gain assignable to the annuity and gain assignable
to the gift. You pay no capital gains tax on the portion
assigned to your gift. The remaining part is spread out over
your actuarially-determined life expectancy. Thus, your income
payments are taxed as ordinary, capital gain and tax-free
income. If you outlive your estimated life expectancy, your
entire income stream is taxed as ordinary income.
Security of Payments
A gift annuity is a
contract between you and the Media Research Center and is guaranteed
by the MRC's assets. You need not be concerned about the
performance of the stock market or interest rates. We would be
happy to send you a copy of our audited financial statements
detailing our assets and liabilities.
Research Center will furnish you with a worksheet that shows the
amount of your charitable income tax deduction and will prepare the
necessary IRS Form 1099-R detailing your income payments under this
plan. This form will be sent to you in January of each
year. For property contributions over $500, you will also need
to file IRS Form 823.
In the mid-1960's, the United States Congress enacted legislation to
encourage individual charitable giving. The result was the
Charitable Remainder Trust (CRT). If an individual is willing
to irrevocably commit cash or appreciated assets to the MRC through
a CRT, they will receive the following benefits:
of capital gains taxes that would have occurred upon the
out-right sale of the appreciated property;
current income tax deduction;
reduction in estate taxes;
increase in current income;
of assets for loved ones; and the
of a charitable legacy at the MRC
At the expiration of lives or a select term of years (not to exceed
20), whatever remains in the trust becomes a charitable gift to the
of a Charitable Remainder Trust (CRT)
stated, a CRT is an irrevocable, tax-exempt trust divided into
income and gift portions.
The CRT will pay a lifetime or term
of years (not to exceed 20) income stream to you and/or others at a
rate of a at least 5% of the trust value. In the case of many
assets, such as stocks or real estate, the trust will generate
substantially more income than as was produced by the asset before
the trust was created. Also, since the CRT is exempt from the
capital gains tax, it can sell the appreciated assets without tax
The second part of the CRT is the
remainder interest that will ultimately pass to the MRC. This
portion, reduced to its present value, constitutes the value of your
charitable contribution deduction in the year of the
of Charitable Trusts
are two basic types of CRTs that accomplish different objectives: 1)
Charitable Remainder Annuity Trust and 2) Charitable Remainder
Remainder Annuity Trust (CRAT)
A CRAT pays a fixed percentage (at
least 5%) of the INITIAL value of trust assets at least once each
year. The trust payout is constant regardless of fluctuations
in trust value or trust earnings. In an annuity trust, if
trust earnings are insufficient to make the required payments in any
year, the difference is paid from trust principal. No
additional contributions are permitted under the rules governing
Remainder Unitrust (CRUT)
A CRUT pays a selected percentage
(at least 5%) of the ANNUAL value of the trust each
year. The trust payout can vary each year due to fluctuations
in trust investment activities and market trends. If trust
earnings in any year are insufficient to pay the selected rate
applied to the ANNUAL value of trust assets, the difference is paid
from trust principal. Additional contributions are permitted
under the rules governing CRUTs.
Planning Features of CRTs
AND RETIREMENT PLANNING
CRTs can be structured to provide initial investment in high
growth/low dividend assets and then converted at a targeted later
date to higher income investments that produce funds for education
or retirement. Even though the income may be received at some
point in the future, the donor receives a charitable contribution
deduction in the year the assets are contributed to the
A testamentary (effective at death)
CRT can be funded with your retirement assets to provide a tax-wise
gift for family members and the MRC.
Trust allows you to transfer assets to future generations of family members
while allowing the Media Research Center to enjoy the investment
income in the meantime.
Often described as a "reverse charitable remainder trust," a Charitable Lead Trust often exists for a definite period of time (15-20 years), instead of lives, with assets being returned to family members at the end of the specified period. At the end of this period, the trust assets are given back to you or named beneficiaries. The Lead Trust is typically used with assets that have the potential for significant future income and appreciation. It allows you to leave a significantly larger inheritance to your heirs than would have been possible with a traditional Will or other investment products.
The income from the assets can be used by the Media Research Center to fund a variety of areas of operation.
Types of Charitable Lead Trusts
1) Grantor Lead Trusts
Immediate income tax deduction;
Principal eventually reverts to donor or others;
Trust income taxable to grantor (donor); and
Especially attractive for individuals with an extraordinarily high income tax in a particular year or those who can fund the trust with tax-free bonds.
2) Non-Grantor Trust
The principal must not revert to the donor or his/her spouse;
Gift tax deduction instead of income tax deduction;
Trust income taxable to trust instead of the donor;
Appreciation in value of assets passes to beneficiaries without inclusion in grantor's estate. Asset value is "frozen" on the gift date;
Especially attractive for one who is interested in shifting income and who wants beneficiaries to receive the property eventually at a reduced estate and gift tax cost to the donor.
Gifts of Real Estate
You may donate your personal residence, all or part of your vacation residence, commercial property, farm or other real estate either as an outright gift or as part of a life-income plan described in the previous sections. Tax savings and other benefits will vary according to the method you choose, your personal circumstances and the value of the property.
Methods of Giving
As always, the simplest form of transferring any property (real or otherwise) is the outright gift. If the property has been held for more than 12 months, you are entitled to a deduction for the full fair market value of the property. In addition, any appreciation in the property will not be taxed as capital gain.
The value of long-term capital gain property is generally deductible up to 30% of your adjusted gross income in the year of the gift. Any leftover amounts may be carried forward up to five subsequent years, subject to the same 30% limitation.
If the selected property has depreciated in value, it is to your advantage to sell the property, establish your tax loss (which can offset any taxable gains) and then donate the proceeds of sale.
OF PROPERTY WITH RIGHT TO OCCUPY UNTIL DEATH
(Life Estate Reserved)
This may consist of a gift of your personal residence, vacation home, yacht, or other property used as a residence (not necessarily your principal residence) or farm (which is any land used by you for production of crops or sustenance of livestock) while retaining the right to live in or otherwise use the property for your life. While you would continue to be responsible for the upkeep, insurance and taxes on the property, you are entitled to a charitable contribution deduction for the present value of your future gift. The amount of this deduction is dependent upon the value of the property and your age at the time of the gift. At your death, the property passes to the Media Research Center and can be sold to fund any designated area of operations.
This may be an attractive way to make a gift of property where the value of the property is greater than the amount you wish to give and it is not practical or economical to divide it. The property is sold to the MRC at less than its fair market value. The difference is the amount of your charitable contribution deduction. If the sale/gift is of appreciated property, a portion of the potential gain will be subject to tax. Acceptability of bargain sale gifts from the MRC's point of view depends, of course, on the marketability of the property, the amount of the bargain and the availability of funds to make the purchase.
Highly appreciated real estate is an excellent choice for funding a charitable remainder trust. You would avoid the capital gains tax, receive an income tax deduction and generate an income stream once the property is sold and converted to income-producing investments. Unitrusts are covered in the previous section.