The staff at the Church of the Nazarene Foundation is blessed to see your goodness each day. You are truly making Christlike disciples in the nation because of the goodness that is stored up in your heart. Thank you for supporting your favorite ministry's future.
For more information on how to support the future of your favorite ministry, please reply to this email or contact us by phone at (913) 577-2983.Check out our Facebook page by clicking here. We post articles relevant to donors, inspirational notes, and other helpful information.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
Zero-Tax Cash and Trust
About 15 years ago Linda's father passed away. As her inheritance, she received a commercial lot that was a mile outside of town. At the time she received the inherited property, it was worth about $100,000.During those 15 years, the town has grown and there are now commercial buildings on both sides of her lot. Her lot is worth $400,000 and could be sold to a developer who would build a commercial building.
During the past few years, Bill and Linda have talked about selling the property. They have not received any income and have had to pay the taxes on the property. As the property value has increased, so have the annual property taxes.
They decided to stop and visit with their CPA Clara to discuss options for the property.
Bill: "Thank you for meeting with us today, Clara. Linda and I have been talking about our lot at the edge of town. As you know, the town has moved that direction and it is now surrounded by other commercial buildings. I think we could sell it and get a good price."
Linda: "Yes, since I inherited it 15 years ago from my father's estate the value has gone up. We put a value of $100,000 on it at the time, but it may sell for up to $400,000 today. We've had two or three inquirers who have suggested that $400,000 could be a pretty good price for the property."
Clara: "Well, this is a very good year to sell the property. But there are fairly high capital gains rates due to your other income and the growth in value. Because you have a large gain of $300,000 in the property, you could pay a large tax. "
Bill: "Yes, we've heard that there is a large potential tax. We would actually like to sell this lot and pay zero tax. Is there a way to sell without tax?"
Clara: "You could do what is called a 'zero tax' sale and unitrust. A charitable remainder unitrust is a special agreement. It allows you to bypass the gain on the property transferred to the trust, provides increased income and gives you a charitable deduction. The benefit of the plan is that you can place part of the property into the trust and sell that part tax-free. Then you are able to use the tax savings from the charitable deduction on that part to offset the tax on the cash you take out. If we do this correctly, you can sell; have part of the value in the unitrust and the balance in cash – all with zero net tax."
Bill: "Clara, please explain a little more about how that might work. How much of the property would we put into the trust and how much would we keep out?"
Clara: "That's a great question. Let's consider first the part that is transferred to the trust and the benefits of that part and then the cash out and finally we will explain how the agreement is created."
Charitable Trust
Bill and Linda could transfer approximately $240,000 in value to the charitable trust. This would be transferred by a deed of that percentage of the property to the trustee of the trust. If they desired, they could self-trustee the trust and select a company to do the trust accounting. Alternatively, a charity or a commercial trust company could serve as trustee.
After the trust is funded with part of the property, the trustee then can conduct a joint sale with Bill and Linda, who still own the balance of the property. The benefit of the charitable trust is that it is tax exempt if the rules are followed. It can sell the $240,000 in property and pay no tax. This could save approximately $42,000 in capital gains tax on that portion.
The trust amount then will be invested and could pay income to Bill and Linda for their two lifetimes. They selected a 5% trust because their financial planner recommended a distribution of 4% to 5% as the "safe in almost any investment climate" amount. Because the unitrust minimum was 5%, they selected that amount. Bill and Linda will receive an estimated $350,000 in income over their 26 year life expectancy.
In addition to bypassing gain on the property of the trust and receiving a very substantial income over their lifetimes, Bill and Linda receive a charitable deduction of about $79,000. Clara suggested that this deduction would be used over about three years and will save $31,000 in income tax.
Cash Received
Assuming that the property can be sold for $400,000, with $240,000 in value transferred by deed to the trust the cash balance is about $160,000.
This $160,000 will be transferred at closing to Bill and Linda. Because the appreciation was about 75% of the value, they would ordinarily owe a large capital gains tax on this amount. The capital gains tax could be over $28,000.
However, they are able to offset the capital gain with the charitable deduction. While the capital gain is taxed in the first year and the deduction savings are spread over three years, over time the approximate amount of savings equal the approximate amount of gain. The net result is that they have received $160,000 with essentially no net tax.
Benefits for Bill and Linda
Bill and Linda were very pleased with the plan that Clara suggested. They are able to keep the entire $400,000 in their home area and not send any significant amount to their state or federal tax authorities. The $240,000 in the trust will pay them income for two lives and eventually benefit two favorite charities. While there will be a substantial charitable gift in the future, the added income from investing all $400,000 for their lifetimes will replace a substantial part of the planned gift. In addition, they had always wanted to do something in the future to benefit their two favorite charities.
SAVVY LIVING
How Medicare Covers Your Eyes
What does Medicare cover when it comes to eye care? I currently have good vision insurance through my employer but will lose it when I retire.Many retirees are unsure whether Medicare covers eye care. The good news is that Medicare covers most eye related medical issues such as cataract surgery, treatment of eye diseases and medical emergencies. Unfortunately, routine care including eye exams and eyeglasses are the beneficiary’s responsibility.
Here’s a breakdown of how original Medicare covers your eyes and some tips that can help you reduce your out-of-pocket costs.
Exams: Typically, routine eye exams (sometimes called “eye refractions”) are not covered under Medicare. However, if you have diabetes or are at risk for glaucoma then you may be entitled to a yearly eye exam. People at high risk of glaucoma include diabetics, those with a family history of glaucoma and older Hispanics and African-Americans.
Medicare will also pay for exams to test and treat medical eye diseases and other conditions like macular degeneration, dry eye syndrome, eye infections or if you get something in your eye.
Eyeglasses and Contact Lenses: In general, Medicare does not pay for eyeglasses or contact lenses. There is one exception. If you have had a conventional intraocular lens inserted during cataract surgery, Medicare will pay for eyeglasses or contact lenses following the operation.
To find affordable eye exams or eyeglasses, many retailers provide discounts to members of groups like AARP or AAA. These discounts can be between 10% and 30% of the total cost.
Also consider Costco Optical, which is considered by Consumer Reports as the best discount store for good eyewear and low prices. It requires a $55 membership fee. Walmart Vision Centers and For Eyes Optical offer low prices too with no required membership.
You can also save big by buying your glasses online. Some online stores like zennioptical.com, goggles4u.com and eyebuydirect.com sell prescription eyeglasses for as little as $7. To purchase glasses online you’ll need your prescription and pupillary distance from an exam along with your frame size.
Eye Surgeries: Medicare covers most eye surgeries including cataract surgery. In cataract surgery, the surgeon removes the cataract and inserts a standard intraocular lens. There are also specialized intraocular lenses that restore full range of vision and reduce the need for glasses after surgery. Medicare will not cover the added cost of inserting these specialized lenses. The extra cost for a specialized lens can run up to $2,500 per eye.
Eye surgeries that are not covered by Medicare include refractive surgery and cosmetic eye surgery (such as eyelid surgery). These surgeries are not considered medically necessary.
Supplemental Insurance
If the eye care service is covered by Medicare then Medicare will pay 80% and you are responsible for paying 20% of the cost. To help with this out-of-pocket expense, you may want to consider getting a Medigap supplemental policy.
If you can’t afford Medigap insurance, check into EyeCare America at eyecareamerica.org. This is a national program that provides medical eye examinations to seniors ages 65 and older and up to one year of treatment at no cost.
Advantage Option
Another way you can get extra vision coverage when you join Medicare is to choose a Medicare Advantage plan instead of original Medicare. These plans are sold by private insurance companies (see medicare.gov/find-a-plan). In addition to covering all of your hospital and medical insurance, these plans typically cover routine eye care and eyeglasses as well as dental, hearing and prescription drugs.
If you choose original Medicare, consider purchasing an individual vision insurance policy (see ehealthinsurance.com). These policies cover routine eye care and eyeglasses and typically cost between $12 and $15 per month.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Senior" book. The articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
The Dairy Farm Produced More Than Milk
"For every animal of the forest is mine, and the cattle on a thousands hills." Psalm 50:10Late in October, as the leaves were in their amber and crimson prime, I made my way deep into the heart of Maine. I would soon set foot on the Cold Brook Farm. Herman and Clarice Dunlop, faithful members of the Skowhegan, Maine First Church of the Nazarene welcomed me to their home.
I had met Herman and Clarice at a Prime Time retreat and was now having the opportunity to once again spend time with them. What a blessing! Though diagnosed with terminal pancreatic cancer, Herman retains his humor and uncompromising reliance on our Lord and Savior. He has numbered our days and Herman is at total peace with whatever God's plan is for his life, be it measured in days or in years. He has a peace that the world cannot give, but only envy.
As I sat at their dining room table the story of the Cold Brook Farm began to unfold. Herman's grandfather in the early years of the twentieth century moved his family and cattle from Canada, south into Maine and established the Cold Brook Farm, a dairy farm situated about two miles north of the town center of Skowhegan. Within a short time, his grandfather began meeting with other Christians in a tent. These tent meetings gave birth to the First Church of the Nazarene in Skowhegan. Herman's parents and then Herman and Clarice continued to operate the dairy farm and help build the Skowhegan church. In the words of Herman, "this farm has produced a lot more than milk". Truer words have never been spoken.
Perhaps as many as a dozen preachers have come off that dairy farm, including Herman's brother, Roland, who served as the District Superintendent in Maine, and Herman and Clarice's daughter. Countless unsuspecting young men have worked at the dairy farm only to have a personal encounter with Jesus prompted by the faithful witness of the Dunlop family.
Today, a brand new First Church of the Nazarene sits on six acres of land that once was the site of the old farmhouse on the Cold Brook Farm. Only an apple tree stands at the drive to the Church to conjure up the memories of the farm of long ago for Herman.
The farm no longer exists. Much of the property has been sold. There are no dairy cows; no more milk production; only the countless lives that have been transformed by the faithfulness of those who lived and worked on the farm. For nearly one hundred years the farm has been a tool for ministry. Now, Herman and Clarice have written the last chapter of Cold Brook Farm. They have placed the remaining parcels of the farm in two Charitable Remainder Unitrusts to perpetuate its legacy. Herman and Clarice will receive lifetime income from the trusts based on the sale of the farm property. At some point in the future, in God's timing, the trusts will be used to establish two endowments to fund ministries of the Church of the Nazarene.
Until that day, when time shall be no more, Cold Brook Farm will continue to produce "more than milk".
If you would like more information about leaving a legacy of faith through planned giving please give us a call. We would be thrilled to visit with you and help you write the final chapter of your own story.
Thank you for your interest in the Church of the Nazarene Foundation. Our hope is to serve you and your family with helpful information. We have an increasing number of friends at CNF who now are benefiting from life income gifts, gift annuities and other plans. Thank you for taking the time to explore the benefits of gift planning.
WASHINGTON NEWS
ACA Premium Credit for Over 80%
Under the Affordable Care Act (ACA), individuals who have annual household income between 100% and 400% of the federal poverty rate are eligible for a premium tax credit. The credit may be claimed on a tax return or there is an advance credit option. Those who elect the advance credit option will benefit from a direct payment by the Department of Health and Human Services to the health insurance company.The credit is based on estimated income reported by the individual. Taxpayers who receive a credit will reconcile that amount on their next annual tax return. If the individual has reported the wrong estimated income, it may be necessary to repay part of the premium tax credit.
The Department of Health and Human Services published a report on May 1 that outlined the results for 2014. The initial March 31 deadline for ACA enrollment was extended to April 19. In May of 2013, the Congressional Budget Office (CBO) estimated that there would be approximately six million individuals eligible for the credit. In February of 2014, the CBO changed that estimate to five million. Of the eight million who signed up by the April 1 deadline, 6.8 million are eligible for the credit.
There was a major increase in sign-ups during March and April. From March 1 through April 19, 3.8 million persons signed up. Those who signed up later exceeded the CBO estimate that 86% would be eligible for the premium credit.
Editor’s Note: The premium credits reduce the cost of health insurance for individuals with incomes in the 100% to 400% range of the federal poverty rate. There are four principal methods that will be used to offset the cost of the premium credit payments to health insurance companies. First, there is a 3.8% Medicare tax on passive income of upper-income persons. Second, there is a tax on medical devices. Third, there is a tax payable by health insurance companies. The second and third amounts are likely to be passed through to consumers through higher health insurance rates. Fourth, there are substantial reductions in Medicare spending. These four methods and other tax increases are designed to offset most of the cost of ACA credits.
FINANCES
Stocks - Twitter User Growth Declines
Twitter, Inc. (TWTR), a popular social media platform, announced its quarterly earnings on Tuesday, April 29. The company reported better than expected sales, but user growth declined steadily in the first quarter of fiscal 2014.The company reported quarterly revenue of $250.49 million. This represents an increase of 119% from the same period last year when the company reported revenue of $113.34 million.
“We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth,” said Dick Costolo, CEO of Twitter. “We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising.”
Twitter announced a net loss for the quarter of $132.36 million. This represents a greater loss than reported in the comparable period last year when the company announced a net loss of $27.03 million. Loss per share came in at $0.23 per share.
While Twitter announced solid first quarter revenue, user growth slowed from 30% during the fourth quarter of 2013 to 25% for the latest quarter. Twitter’s entire business model depends on getting in front of as many users as possible and monetizing those interactions through advertising. Thus, Wall Street investors are understandably focused on the decline in user growth rather than the increase in revenue. Twitter’s stock fell 12% following their earnings report. Analysts worry that Twitter users are beginning to lose interest in micro-blogging in favor of video and image sharing applications like Snapchat and Instagram.
Twitter, Inc. (TWTR) shares ended the week at $39.02, down 6.6% for the week of 4/28.LinkedIn Lowers Guidance
LinkedIn Corporation (LNKD), an online professional networking site, reported its latest quarterly earnings on Thursday, May 1. The company reported strong revenue, but lowered guidance for the remainder of 2014.
The company reported quarterly revenue of $473.19 million. This represents a significant increase from the same period last year when the company reported revenue of $324.70 million. This was above analyst projections of $466.57 million.
“The first quarter was strong for LinkedIn in terms of our member engagement and financial results,” said Jeff Weiner, CEO of LinkedIn. “We made significant progress against several strategic priorities including expanding internationally with our China launch, extending our shift to content marketing, and furthering our goal to make LinkedIn the definitive professional publishing platform by giving members the ability to publish long-form content.”
LinkedIn reported a net loss of $13.32 million or $0.11 per share for the quarter. The company reported net income of $23.33 million during the comparable quarter last year.
Despite great revenue numbers, LinkedIn lowered its revenue guidance for 2014 to a range of $2.06 to $2.08 billion. Wall Street analysts had anticipated 2014 revenue of $2.11 billion. As a result, LinkedIn shares dropped almost 7% following the company’s earnings release.
LinkedIn Corporation (LNKD) shares ended the week at $147.73, down 6.4% for the week.Expedia Reports Strong Revenue
Expedia, Inc. (EXPE), an online travel company, announced its latest earnings on Thursday, May 1. The company beat analysts’ estimates for both quarterly revenue and earnings per share.
Expedia reported revenue of $1.2 billion for the quarter. This represents an increase of 18.6% from the same period last year when the company reported revenue of $1.01 billion.
“We’re pleased with a solid first quarter performance and a good start to the year,” said Dara Khosrowshahi, President and CEO of Expedia, Inc. “From a geographic perspective revenue growth is healthy across all the major regions. Gross bookings growth of 29% was boosted by continued strong performance at most of our major brands in addition to the gross bookings generated through the Travelocity implementation. From a brand perspective, brand Expedia continued to deliver strong top-line performance as it continues driving innovation on its new technology platforms.”
The company reported a quarterly net loss of $14.30 million. Expedia reported a net loss of $104.23 million for the comparable quarter last year.
Expedia analyzed its travel search data and listed the top destinations for Americans during the summer of 2014. The most popular destinations in order by region were New York, Las Vegas, Los Angeles, Boston, Chicago, San Francisco, Orlando, Washington D.C., Seattle and Atlanta. Expedia also released data on the average price of flight within the U.S. - $499 – and the average price of a hotel room in the U.S. - $171 per night.
Expedia, Inc. (EXPE) shares ended the week at $71.15, up 2.1% for the week.
The Dow started the week of 4/28 at 16,363 and closed at 16,513 on 5/2. The S&P 500 started the week at 1,865 and closed at 1,881. The NASDAQ started the week at 4,092 and closed at 4,124.
Bonds - Unemployment Rate and Treasury Yields Fall
Treasuries prices rose and yields fell this week as investors worried about increasing geopolitical uncertainty surrounding the situation in Ukraine. In addition, the Labor Department, the Commerce Department and the Federal Reserve all made announcements this week.This week Russia called for another meeting of the UN Security Council on the situation in the Ukraine. The Council met on Friday, May 2. This is the thirteenth meeting of the Security Council so far on this issue and no solution has been reached. “There’s a concern that things are heating up there again,” said Larry Milstein, Managing Director of Government-Debt Trading at R.W. Pressprich & Co. in New York. “You saw the Ukranian military go into the eastern cities and office buildings. Those sorts of things definitely boost the Treasury market.” As a result, the 30-year bond yield fell two basis points to 3.4% during early trading on Friday, May 2.
The Labor Department released employment data for April on Friday, May 2. Overall, nonfarm payrolls rose by 288,000. This number is much higher than economists’ estimate of 218,000 jobs. The unemployment rate fell from 6.7% in March to 6.3% in April. The unemployment rate is now at its lowest level since September 2008.
“The economy is gathering momentum after the bad winter,” said Michael Gapen, Senior U.S. Economist at Barclays in New York. “The unemployment rate will stay in its downward trend, which means tapering will continue.” The “bad winter” refers to the Commerce Department’s report this week announcing that GDP increased only 0.1% in the first quarter of 2014. This is much lower than the 2.6% growth during the fourth quarter of 2013.
In addition, on Wednesday, April 30 Fed Chair Janet Yellen and the Federal Open Market Committee decided to reduce bond purchases in May by $10 billion to $45 billion. It is likely that as long as growth picks up in the next quarter and the unemployment rate continues to decline that the Fed will continue to taper its bond purchases. In addition, Yellen has stated that the Federal Funds rate will likely stay at its low level of between zero and 0.25% “for some time.”
The 10-year Treasury note yield finished the week of 4/28 at 2.59% while the 30-year Treasury note yield finished the week at 3.37%.
CDs and Mortgages - Interest Rates Decline Slightly
Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, May 1. The report showed average fixed mortgage rates moving slightly lower upon the release of economic data this week.The 15-year fixed rate mortgage averaged 3.38% this week. This represents a decrease from last week when it averaged 3.39%. Last year at this time the 15-year fixed rate mortgage averaged 2.56%.
This week, the 30-year fixed rate mortgage averaged 4.29%. This represents a decrease from last week when it averaged 4.33%. One year ago, the 30-year fixed rate mortgaged averaged 3.35%.
Frank Nothaft, Vice President and Chief Economist at Freddie Mac, commented on this week’s average mortgage rates. “Mortgage rates were down slightly following the release of real GDP estimates for the first quarter of the year which rose 0.1% and fell well short of market expectations. Meanwhile, the pending home sales index rose in March ending eight consecutive months of decline and the S&P/Case-Shiller 20-city composite house price index rose 12.9% over the 12-months ending in February 2014.”
The money market fund finished the week of 4/28 at 0.4%. The 1-year CD finished at 0.7%.
-------
Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, college, global mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access any of this updated financial and gift planning information, please select our website.
Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, KS 66220 united States
-------
No comments:
Post a Comment