One couple’s partnership with TSA

Planned giving benefits The Salvation Army and provides individual financial solutions.

by Jeff Hesseltine – 

For husband and wife duo, Bruce and Lyn Thomas, early exposure to The Salvation Army eventually led them as a couple to contribute to the Army’s work.

As a young girl, Lyn lived near the Travis Air Force Base, near San Francisco, Calif. Moving to the city for her first job, Lyn wanted a safe place to live and chose The Salvation Army Evangeline Residence. Later, when she worked with the United Way Fund, she learned that up to 90 percent of all money donated to The Salvation Army went directly to help people in need—one of the highest percentages for any charity.

Bruce remembers childhood stories of The Salvation Army caring for World War II soldiers on Europe’s front lines—providing doughnuts and blankets, and a bit of home. “My mother always said that you could never go wrong by supporting The Salvation Army,” Bruce said.

As adults, both Bruce and Lyn worked as real estate agents, each investing in several rental properties. When Lyn’s mother died, she had to decide what to do with her inheritance. Not ready to retire, the couple decided to establish a Deferred Charitable Gift Annuity.

Deferred annuities are contracts between you and an insurance company in which you agree to invest a sum of money in one lump over a specific period of time, which builds up a pool of income that can be accessed when you retire. Benefits include: a current charitable income tax deduction, tax free growth of principal, guaranteed payments for life and the bypass of capital gains tax.

Naming the Army trustee

When the Thomases decided to simplify their lifestyle and sell the properties they had acquired over the years, they faced a nearly 25 percent capital gains tax on their property’s appreciated value.

The couple called their Salvation Army Planned Giving specialist who developed a plan that could eliminate the capital gains tax. They settled upon a Charitable Remainder Trust, with The Salvation Army as trustee.

Using this method, Bruce and Lyn bypassed the capital gains tax, received a charitable income tax deduction and a life income at a payout rate of their choice. Additionally, they have seen their trust principal grow, providing them increasingly larger income payments that provide a hedge against inflation. They also like this tool because they can make additions to the trust, thereby receiving increased payments and additional charitable
income tax deductions.

Both the Thomases and The Salvation Army benefit from this arrangement—not to mention the satisfaction the pair receives knowing that when the trust ends, the remaining principal will go to The Salvation Army in order to benefit people in need.

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