Shalom to you, our partners in ministry. It is an honor to share with you the latest news from Washington, Savvy Living, Personal Planning, gift stories, finance news, and timely articles.
There are no "asks" in this eNewsletter as it is designed totally to be a helpful service to you. Feel free to share it with others in your family or your friends. If you would like me to send it directly to them please send me their email address.
This information is put together in a way to be a help in understanding what is happening in our economy so you can use it to your best advantage. I hope this information is useful to you.
If you have any questions or I can be of assistance to you please contact me.
David Stone
Director of Donor Relations
PERSONAL PLANNER
Gifts of Homes
Most families purchase their largest personal residence in their mid-forties. Families with children often need the additional space. Other families think they want to Read More
Personal Planner
Gifts of Homes
Most families purchase their largest personal residence in their mid-forties. Families with children often need the additional space. Other families think they want to purchase a home that they can enjoy for many years.
By the time you reach retirement age, you probably have an empty nest. The children or other family members have now moved on and are creating their own homes. Some individuals at that point decide they like their home in their neighborhood and would like to stay there for their lifetime. Others might want to sell the larger property and move to a condo or retirement community.
Stay-at-Home Sam
Sam is a single person and enjoys his home. He bought the residence when he was 48 because he loved the neighborhood.
Sam has cheerfully planted shrubs and flowers on his lot. He loves to spend time outside taking care of the property. Sam enjoys the neighborhood and plans to live there for the rest of his life. He just turned 75 this year and is in very good health.
He has a pension from his company, his Social Security and an IRA that was created by rolling over a qualified retirement plan. With income from all three sources, Sam now has no deductions other than his charitable gifts and is paying very substantial income taxes. As a result, he is very interested in finding a way to reduce his tax burden.
Sam bought the home for $200,000. It now has increased in value to $450,000. Sam also has been a regular supporter of two community charities that assist young people. He would like to eventually leave his home to charity to benefit youth in his community.
Sam Decides to Visit With His CPA Jim
Sam: "You know, Jim, I've lived in my home for many years and I like it here. I live in a great neighborhood and I know these neighbors. So I would like to stay here, but as you know, I keep paying more and more income tax each year. It would be great to have a way to save some taxes and eventually pass the home to charity."
Jim: "Yes, we've talked several times about different ideas to save taxes. Since you like your home and would like eventually to transfer it to a charity, there is a way that you could save a large amount of taxes today. The gift plan is called a transfer with a life estate. You deed the right to own the home after you pass away to your favorite two charities and retain the right to live there for your lifetime. Based on your age and home value, you would receive a charitable deduction of around $250,000. This would save taxes for you over as many as the next five years. In fact, with some cash gifts plus this deduction, you could cut your tax bill in half."
Sam: "Cutting my taxes in half is a great idea. And I do want to help these young people through these charities eventually. But what if 10 years from now I want to move to a retirement community? What happens then?"
Jim: "There are some rollover options at that time. Each year, as you get older, the value of the life interest goes down slightly. Still, you will have a substantial value. You could later have a joint sale with the charity and receive your portion for the life interest in cash. Another option is to transfer your life interest portion to the charity in exchange for a gift annuity."
Sam: "This sounds like a great plan. Let's contact the gift planner at my favorite charity to get the ball rolling."
Clara Buys a Condo
Clara and Frank were married for 58 years. Frank passed away two years ago, leaving Clara and their three children who are now all adults.
When Clara and Frank were both 43, they bought a four-bedroom home. With two parents and three children at home, the atmosphere was very lively and eventful. When Clara and Frank reached their fifties, the children moved out and now are raising their own families.
Clara and Frank bought the home for $200,000. It is in a very nice neighborhood and has appreciated over the years to $800,000 in value. Clara decided to sit down with her CPA, Alice, to discuss the possibility of selling her home and moving to a condo.
Clara: "You know, Alice, Frank and I really needed the large house when the three children were at home. With five of us, we filled that four-bedroom house and there were always friends of our children visiting overnight. But now, with Frank gone and the children on their own, I don't need that big four-bedroom house. In fact, it's becoming a burden to maintain it. I would be much happier in a nice two-bedroom condo. I have been looking around and I think I have found one for $300,000 that would be just right for me."
Alice: "Yes, we all get to a point where it may make good sense to downsize. With the initial purchase price of your home and then an increase in basis when Frank passed away, you have a basis of about $400,000 in your home. If you were to sell it for $800,000, the gain would be $400,000. You would use your $250,000 exclusion for sale of your principal residence and $150,000 would be taxable."
Clara: "Well, I am not sure I want to pay tax on that much gain. I was thinking about making a gift to the charity that Frank and I have always supported. They are building a new wing on one of their facilities, and Frank and I had always talked about making a gift large enough that it could be named in our honor."
Alice: "How much is the naming opportunity?"
Clara: "It is a fairly large gift proposal and yet there is the value in the home. Plus, I have an IRA and other investments. The gift opportunity is $100,000. I was thinking that I could give 1/8 of the value of the home to the charity. The remaining $700,000 would more than cover the condo, plus I could add $400,000 to my current CDs."
Alice: "That actually works quite well. With your $250,000 exclusion, it reduces the taxable gain on your $700,000 home sale of your part to $100,000. If we transfer the 1/8 by deed to the charity just before the sale, you will bypass tax on the $100,000 and have a charitable deduction. The tax savings on your charitable deduction will more than offset the tax payable on your gain. You will end up with no tax on this transfer and $700,000 cash. After you buy the condo for $300,000, you are exactly right that you will have $400,000 to add to your CDs or other investments."
Clara: "That looks like exactly the right solution. Let's contact my attorney Bill and we will set up the gift. We can also list the home and find a buyer. I'm very excited about moving to the new condo in this retirement community. There are several friends from my social group in that community and I know I will enjoy living there."
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SAVVY LIVING
How to Avoid Medicare Mistakes When You're Still Working
Should I enroll in Medicare at age 65 if I'm still working and have coverage through my employer? Read More
Savvy Living
How to Avoid Medicare Mistakes When You're Still Working
Should I enroll in Medicare at age 65 if I'm still working and have coverage through my employer?
The rules for enrolling in Medicare can be very confusing with all the different choices available today. Unfortunately, when you postpone retirement past age 65, it becomes even more complicated.
First, let's review the basics. Remember that original Medicare has two parts. Part A provides hospital coverage and is free for most people. Part B covers doctor's bills, lab tests and outpatient care. Part B has a monthly premium of $104.90 (or higher for individuals earning $85,000 or more a year).
If you are receiving Social Security, you will be enrolled automatically in parts A and B when you turn 65. If you aren't yet receiving Social Security, you will have to apply. You can apply online at SSA.gov/medicare, over the phone at 800-772-1213 or through your local Social Security office.
If you plan to continue working past the age of 65 and have health insurance through your job, your first step is to ask your benefits manager, or human resources department, how your employer's insurance works with Medicare. In most cases, you should at least take Medicare Part A because it's free. Whether or not you decide to take Part B will depend on the size of your employer.
Small employer: If your current employer (or spouse's employer if he or she is providing your coverage) has fewer than 20 employees, then Medicare will be your primary insurer and you should enroll in Medicare Part B during your initial enrollment period. This is a seven-month period that includes the three months before, the month of, and the three months after your 65th birthday.
If you miss the seven-month sign-up window, you'll have to wait until the next general enrollment period, which runs from January 1 to March 31 with benefits beginning the following July 1. You'll also incur a 10% penalty for each year you wait beyond your initial enrollment period, which will be tacked onto your monthly Part B premium.
Large employer: If your employer (or your spouse's employer) has 20 or more employees, then your employer's group health plan will be your primary insurer, so long as you (or your spouse) remain an active employee. If this is the case, you do not need to enroll in Part B when you turn 65 if you're satisfied with the coverage you are receiving through your job. But if you do decide to enroll in Medicare, it will supplement your employer's insurance by offering a secondary payment on all of your claims.
Once your employment (or group health coverage) ends, you will then have eight months to sign up for Part B without a penalty. This is known as the "Special Enrollment Period."
Drug coverage: You also need to verify your prescription drug coverage. Call your benefits manager or insurance company to find out if your employer's prescription drug coverage is considered "creditable." Creditable prescription drug coverage is one that is considered to be as good as, or better than, the Medicare prescription drug benefit. If your employer's prescription drug coverage is creditable, then you don't need to enroll in a Medicare Part D prescription drug plan. If it isn't, you should purchase a plan during your initial enrollment period because you'll incur a premium penalty if you enroll later (the penalty is 1% of the average national premium for every month you don't have coverage). To purchase a plan see medicare.gov/find-a-plan.
For additional help, visit Medicare.gov or contact your State Health Insurance Assistance Program (SHIP) atShiptacenter.org. The Medicare Rights Center also offers a free helpline at 800-333-4114.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These 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 Living, P.O. Box 5443, Norman, OK 73070.
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YOUR PLAN
Deferred Gift Annuity
Several years ago Larry and Allison invested $30,000 in what they believed to be an attractive stock. It turned out to be a very wise decision. Read More
Deferred Gift Annuity
Several years ago Larry and Allison invested $30,000 in what they believed to be an attractive stock. It turned out to be a very wise decision, because the value of the stock increased to $100,000 a few years later. Though they were not in need of additional income at the time, the couple decided to cash in on this growth and began considering selling the stock.
Allison: We had had a good year and were looking for ways to maximize deductions and reduce what we owed in taxes. At the same time, we had been exploring the best way to make a gift to our favorite charity.
Larry: Allison and I were both age 50 at the time, in good health and still working. And though we didn't really need extra current income, we were planning to retire at age 65 so we were always interested in smart retirement planning. Our goal was to be able to live comfortably and travel in our motorhome to visit friends and family.
Allison: I remember when we met with a gift planner. He explained the benefits of setting up a deferred gift annuity. Instead of selling, we could give our stock to our favorite charity and receive an immediate charitable tax deduction. Plus, when we turn 65, the deferred gift annuity would make annual retirement income payments to us for our lifetime.
Larry: We decided to set up the deferred gift annuity. And we experienced first hand each of the benefits Allison mentioned: we received a charitable tax deduction and tax savings immediately. And now that we're retired, we receive income each year that helps make our retirement travel possible. On top of all of this, the deferred gift annuity makes a portion of the income payments we receive tax free.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your gift annuity benefits may be different, you may want to click here to view a color example of your benefits.
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WASHINGTON NEWS
$950 Million in Unclaimed IRS Refunds
In IR-2016-38 the IRS announced that one million taxpayers qualify for a potential $950 million in tax refunds. The one million taxpayers failed to file their year 2012 tax returns. Read More
Washington News
$950 Million in Unclaimed IRS Refunds
In IR-2016-38 the IRS announced that one million taxpayers qualify for a potential $950 million in tax refunds. The one million taxpayers failed to file their year 2012 tax returns.
IRS Commissioner John Koskinen reports, "A surprising number of people across the country overlook claiming tax refunds each year. But the clock is ticking for taxpayers who did not file a 2012 federal income tax return, leaving nearly $1 billion in refunds unclaimed. We especially encourage students and others who did not earn much money to look into this situation because they may still be entitled to a refund. Don't forget, there is no penalty for filing a late return if you are due a refund."
Tax refunds may be obtained up to three years after the initial filing. The deadline for filing a late 2012 tax return and collecting a refund is April 18, 2016.
An estimated 1,037,600 taxpayers could claim an average refund of $718. Many of the non-filers are students or young persons with modest incomes.
If you choose to file and claim a refund for 2012, you also should file for years 2013 and 2014. The IRS has the right to use your tax refund to pay your federal tax bill for subsequent years. There also may be some persons who have obligations for child support or federal debts, such as student loans, who do not qualify for a refund.
Low-income individuals who have earned income may qualify for the Earned Income Tax Credit (EITC). The maximum EITC refund in 2012 is $5,891.
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FINANCES
Stocks - Square Releases Earnings Report Read More
Square Releases Earnings Report
Square, Inc. (SQ) reported its quarterly and annual financial results on Wednesday, March 9. The company posted mixed results in its first quarterly earnings report since going public.
The company reported revenue of $374 million for the quarter, up from $251 million for the same quarter in the previous year. Revenue for the full year was $1.3 billion, which is an increase from $850 million for the prior year.
"We are off to a great start with fourth quarter results that demonstrate both high growth and strong operating performance," said Square CEO Jack Dorsey and CFO Sarah Friar in a letter to shareholders. "Our results show we are executing on what we set out to do: grow our core payments business and extend into other services that deepen our relationship with our sellers."
Square reported an operating loss of $48 million for the quarter. For the full year, the company posted an operating loss of $150 million.
Square specializes in credit card payment processing. The company provides hardware to help sellers more conveniently accept credit card payments. Perhaps the company's most popular product is a card reader that easily attaches to a smartphone via the headphone jack. With the advent of newer payment technology such as ApplePay, as well as the new chip-card requirement in the U.S., Square has begun offering a new "contactless and chip reader."
Square, Inc. (SQ) shares ended the week at $11.01, down 7.5% for the week.
Dick's Sporting Goods Reports Earnings
Dick's Sporting Goods, Inc. (DKS) released its quarterly and full year earnings on Tuesday, March 8. The company's earnings fell short of analysts' expectations.
The company reported $2.2 billion in revenue for the quarter, falling short of analysts' expectations of $2.3 billion. For the full year, revenue was $7.3 billion.
"Given the challenging conditions we faced with the unseasonably warm weather, we operated quite well in the fourth quarter, generating earnings within our guided range and driving results in important growth categories," said Dick's CEO Edward W. Stack. "In 2015, we grew our omni-channel platform by maintaining strong new store productivity and driving our eCommerce business. We ended the year with a strong balance sheet and returned over $420 million to shareholders through dividends and share repurchases."
The sporting goods retailer reported net income of $129 million, or $1.13 per share. This is a decrease from the same quarter last year when the company reported net income of $155.5 million, or $1.30 per share. Net income for the full year was $330.4 million.
Dick's Sporting Goods is one of America's largest retailers of sports equipment. Rival retailer Sports Authority filed for Chapter 11 bankruptcy earlier this month. In response, Dick's CEO Edward W. Stack remarked that the company will be "very aggressive" in attempting to picking up Sports Authority's lost customers. Stack also indicated the company is considering acquiring the leases for the soon-to-be closed Sports Authority locations.
Dick's Sporting Goods, Inc (DKS) shares ended the week at $46.44, up 6.6% for the week.
Dollar General Increases Profit
Dollar General Corporation (DG) reported its quarterly and full year earnings on Thursday, March 10. The company reported record numbers in sales and net income.
Net sales were $5.29 billion for the quarter, missing analysts' expectations of $5.3 billion. The company reported net sales of $20 billion for the full year, up from $18.9 billion for the prior year.
"2015 was another great year for Dollar General as we achieved strong financial results with a focus on profitable sales growth," said Dollar General CEO Todd Vasos. "For the 26th consecutive year, we delivered positive same-store sales growth. In the fourth quarter, we effectively balanced sales and operating profit through our toughest quarterly comparison of the year to deliver record results leading to full year diluted EPS growth of 13%."
Net income was $376 million for the quarter, up from $355 million for the same quarter in the previous year. For the full year, Dollar General reported $1.1 billion in net income.
Dollar General stores offer many brand-name items at discount prices. The company saw sales rise 2.2% for its stores that have been open for at least 13 months. In addition, the company opened over 700 new stores in 2015 and plans to open roughly 900 more in the upcoming year.
Dollar General Corporation (DG) shares ended the week at $85.01, up 14.7% for the week.
The Dow started the week of 3/7 at 16,991 and closed at 17,213 on 3/11. The S&P 500 started the week at 1,996 and closed at 2,022. The NASDAQ started the week at 4,691 and closed at 4,748.
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Bonds - Treasury Yields Reach One-Month High Read More
Treasury Yields Reach One-Month High
The yield on the benchmark 10-year note reached its highest level in over a month as investors released government debt in favor of riskier equity assets. The relaxation of bond prices, which fall as yields rise, is being attributed to a three-month high in oil futures, easing market turmoil and a strengthening labor market.
The 10-year Treasury yield jumped two basis points to 1.950% on Friday, its highest yield since February 1. This increase followed the International Energy Agency's forecast that oil prices may have bottomed out. The positive oil prognosis caused a stock market rally, as investors lessened their appetites for safe-haven bonds and quenched their thirst for stocks.
"It really indicates that traders are starting to anticipate the floor," said Ann-Louise Hittle, Vice President of macro oils research at Wood Mackenzie. In recent days, crude oil futures have increased nearly 50% from $26 a barrel in February to approximately $40 a barrel early on Friday.
Another factor easing the pressure on Treasury yields is the anticipated positive report from the Federal Reserve's monetary policy meeting next week. While analysts do not expect the Fed to announce that it will raise interest rates in March, data from CME Group released on Friday indicated a 46% likelihood of a rate increase from the Fed as early as its June policy meeting.
"The labor market is in a better position, some of the dollar strength has moderated and perhaps oil has found a bottom," said Michael Hanson, senior global economist at Bank of America Corp. in New York. The Federal Open Market Committee will publish its policy statement Wednesday afternoon, together with updated quarterly economist forecasts and projections following the Federal Reserve's monetary policy meeting on Tuesday and Wednesday.
The 10-year Treasury note yield finished the week of 3/7 at 1.98% while the 30-year Treasury note yield was 2.75%.
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CDs and Mortgages - Interests Rates Continue to Rise Read More
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Thank you for your interest in planned giving. To access any of our resources, please go to our website.
Your Brother in Yeshua (Jesus),
David Stone
Jews for Jesus
Interests Rates Continue to Rise
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, March 10, 2016. Mortgage interest rates rose for the second consecutive week.
The 30-year fixed rate mortgage averaged 3.68% this week. This represents an increase from last week when it averaged 3.64%. Last year at this time, the 30-year fixed rate mortgage averaged 3.86%.
This week, the 15-year fixed rate mortgage averaged 2.96%. This was up from last week when it averaged 2.94%. The 15-year fixed rate mortgage averaged 3.10% one year ago.
"The 10-year Treasury yield ended the survey week exactly where it started, however the solid February employment report boosted the yield noticeably on Friday and Monday," said Freddie Mac Chief Economist Sean Becketti. "Our mortgage rate survey captured the impact of this temporary increase in yield, and the 30-year mortgage rate rose 4 basis points to 3.68%. This marks the second increase this year. Nonetheless, the mortgage rate remains 33 basis points lower than its end-of-2015 level."
The money market fund finished the week of 3/7 at 0.3%. The 1-year CD finished at 0.6%.
Thank you for your interest in planned giving. To access any of our resources, please go to our website.
Your Brother in Yeshua (Jesus),
David Stone
Jews for Jesus
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"Jewish people really do need Jesus." David Brickner, Jews for Jesus of
A growing number of Christian leaders recently made statements that no mission work should go towards conducting or supporting sharing Jesus with the Jewish community. Essentially, they argue that since the Jewish people are already "God's people," they don't need to be saved by faith in Jesus.
"Jewish people really do need Jesus." David Brickner, Jews for Jesus of
San Francisco, California United States
A growing number of Christian leaders recently made statements that no mission work should go towards conducting or supporting sharing Jesus with the Jewish community. Essentially, they argue that since the Jewish people are already "God's people," they don't need to be saved by faith in Jesus.
They couldn't be more wrong. Jewish people really do need Jesus.
Here at Jews for Jesus, we weep and pound the table about the Jewish people who don't know Christ. In fact, we feel very specifically called by God to reach the Jewish community with the saving message of Jesus Christ.
We know that there are many thoughtful Christians who believe this as well. That's why we’re asking you for your help.
Would you be willing to support Jews for Jesus — especially now in this holy season as we celebrate Christ's resurrection? If Jesus really and truly rose from the dead, then how can we even contemplate not telling that good news to Jewish people?
You can help reach unbelieving Jewish people by giving a gift to Jews for Jesus.
Give a gift to Jews for Jesus today!
Your brother in Jesus the Messiah,
David Brickner,
Executive Director,
Jews for Jesus
Here at Jews for Jesus, we weep and pound the table about the Jewish people who don't know Christ. In fact, we feel very specifically called by God to reach the Jewish community with the saving message of Jesus Christ.
We know that there are many thoughtful Christians who believe this as well. That's why we’re asking you for your help.
Would you be willing to support Jews for Jesus — especially now in this holy season as we celebrate Christ's resurrection? If Jesus really and truly rose from the dead, then how can we even contemplate not telling that good news to Jewish people?
You can help reach unbelieving Jewish people by giving a gift to Jews for Jesus.
Give a gift to Jews for Jesus today!
Your brother in Jesus the Messiah,
David Brickner,
Executive Director,
Jews for Jesus
Our mailing address is:
Jews for Jesus
60 Haight Street
Jews for Jesus
60 Haight Street
San Francisco, California 94102, United States
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