Dear friends,
I heard an interesting quote a few weeks ago that I'd like to share with you: "You can give without loving, but you cannot love without giving" (Amy Carmichael).
This is not the first time I have heard these words, and they continue to ring true. We probably all know people who "give without loving": those who give out of obligation, to get something in return, to repay a favor, or for a tax break. But how many of us know people who love deeply, and with their whole hearts, who do not in some way give to those they love?
These words bring to our mind the incredible generosity of those who love others, and for that generosity I am thankful. This quote is also a challenge. It calls those of us who strive to love as Christ did to give sacrificially beyond the place where we are comfortable. The more Christ speaks into our lives, the more we are compelled to generously share his love with others.
That is why it is my prayer for our love and generosity to walk hand-in-hand together in the name of Christ Jesus.
Blessings,
Ken Roney
President
---------------------
WASHINGTON NEWS
Free Tax Return Help
In IR-2016-35, the IRS reminded taxpayers that there is free tax help available. First, the Volunteer Income Tax Assistance (VITA) program is available for persons with incomes of $54,000 or less, disabilities or limited English proficiency.
I heard an interesting quote a few weeks ago that I'd like to share with you: "You can give without loving, but you cannot love without giving" (Amy Carmichael).
This is not the first time I have heard these words, and they continue to ring true. We probably all know people who "give without loving": those who give out of obligation, to get something in return, to repay a favor, or for a tax break. But how many of us know people who love deeply, and with their whole hearts, who do not in some way give to those they love?
These words bring to our mind the incredible generosity of those who love others, and for that generosity I am thankful. This quote is also a challenge. It calls those of us who strive to love as Christ did to give sacrificially beyond the place where we are comfortable. The more Christ speaks into our lives, the more we are compelled to generously share his love with others.
That is why it is my prayer for our love and generosity to walk hand-in-hand together in the name of Christ Jesus.
Blessings,
Ken Roney
President
---------------------
WASHINGTON NEWS
Free Tax Return Help
In IR-2016-35, the IRS reminded taxpayers that there is free tax help available. First, the Volunteer Income Tax Assistance (VITA) program is available for persons with incomes of $54,000 or less, disabilities or limited English proficiency.
Read More
Washington News
Free Tax Return Help
In IR-2016-35, the IRS reminded taxpayers that there is free tax help available. First, the Volunteer Income Tax Assistance (VITA) program is available for persons with incomes of $54,000 or less, disabilities or limited English proficiency. Second, Tax Counseling for the Elderly (TCE) is available for persons age 60 and older.
A key area of interest for both VITA and TCE is the Earned Income Tax Credit (EITC) and the child and dependent care credit. The EITC is refundable for qualifying taxpayers who have earned income. Last year, nearly $66.7 billion was refunded under this program. The amount per recipient was about $2,400. The maximum benefit for year 2015 is $6,242. You must file IRS Form 1040 to receive the EITC benefit.
For additional information on VITA or TCE, go to www.irs.gov and download Publication 3676-B. There is also a “locator” tool on irs.gov and the smartphone app “IRS2GO”. The locator tool will help you find the nearest location with a VITA or TCE program.
If you want to make use of VITA or TCE, you will need to take several items to the location.
1. Identification – You will need a photo ID. This is usually a driver’s license or similar document.
2. Social Security Card – Bring the Social Security cards of the taxpayer, spouse and all dependents. The birthdates of everyone must also be available.
3. Income Tax Identification Number (ITIN) – An ITIN may be an acceptable substitute for a Social Security Number.
4. Wages and Earnings – You will need your W-2s, Forms 1099-R or Forms 1099-MISC.
5. Banks and Credit Unions – Gather all of your income and dividend statements. If you have a mortgage and plan to itemize deductions, you will need that statement from your lender.
6. Health Insurance – You may have received Forms 1095-A, 1095-B or 1095-C. These will be needed to complete your Affordable Healthcare statements. If you have a Health Insurance Exemption Certificate, that also will be needed.
7. Daycare – If you have a child or dependent who is in daycare, you will need the total amount of payments and the daycare provider’s Social Security Number or business Employer Identification Number (EIN).
8. Tax Returns – You should have your prior year’s state and federal tax returns.
Members of the military may seek assistance from the Armed Forces Tax Council (AFTC). The AFTC assists members of the Army, Navy, Marine Corps, Air Force and Coast Guard. Many AFTC volunteers understand military tax issues such as combat zone pay.
Payments are due by April 18, 2016. You may use the “Direct Pay” system to make a transfer directly from your checking or savings account to the IRS.
Most taxpayers will file electronically and also receive an electronic refund, if applicable. You need a bank check with the account and routing numbers to receive an electronic refund.
---------------------
PERSONAL PLANNER
Gifts of Land
Many friends of charities have benefited from a gift of land or a gift of land with a building or other structure. There are two main benefits for this gift.
Washington News
Free Tax Return Help
In IR-2016-35, the IRS reminded taxpayers that there is free tax help available. First, the Volunteer Income Tax Assistance (VITA) program is available for persons with incomes of $54,000 or less, disabilities or limited English proficiency. Second, Tax Counseling for the Elderly (TCE) is available for persons age 60 and older.
A key area of interest for both VITA and TCE is the Earned Income Tax Credit (EITC) and the child and dependent care credit. The EITC is refundable for qualifying taxpayers who have earned income. Last year, nearly $66.7 billion was refunded under this program. The amount per recipient was about $2,400. The maximum benefit for year 2015 is $6,242. You must file IRS Form 1040 to receive the EITC benefit.
For additional information on VITA or TCE, go to www.irs.gov and download Publication 3676-B. There is also a “locator” tool on irs.gov and the smartphone app “IRS2GO”. The locator tool will help you find the nearest location with a VITA or TCE program.
If you want to make use of VITA or TCE, you will need to take several items to the location.
1. Identification – You will need a photo ID. This is usually a driver’s license or similar document.
2. Social Security Card – Bring the Social Security cards of the taxpayer, spouse and all dependents. The birthdates of everyone must also be available.
3. Income Tax Identification Number (ITIN) – An ITIN may be an acceptable substitute for a Social Security Number.
4. Wages and Earnings – You will need your W-2s, Forms 1099-R or Forms 1099-MISC.
5. Banks and Credit Unions – Gather all of your income and dividend statements. If you have a mortgage and plan to itemize deductions, you will need that statement from your lender.
6. Health Insurance – You may have received Forms 1095-A, 1095-B or 1095-C. These will be needed to complete your Affordable Healthcare statements. If you have a Health Insurance Exemption Certificate, that also will be needed.
7. Daycare – If you have a child or dependent who is in daycare, you will need the total amount of payments and the daycare provider’s Social Security Number or business Employer Identification Number (EIN).
8. Tax Returns – You should have your prior year’s state and federal tax returns.
Members of the military may seek assistance from the Armed Forces Tax Council (AFTC). The AFTC assists members of the Army, Navy, Marine Corps, Air Force and Coast Guard. Many AFTC volunteers understand military tax issues such as combat zone pay.
Payments are due by April 18, 2016. You may use the “Direct Pay” system to make a transfer directly from your checking or savings account to the IRS.
Most taxpayers will file electronically and also receive an electronic refund, if applicable. You need a bank check with the account and routing numbers to receive an electronic refund.
---------------------
PERSONAL PLANNER
Gifts of Land
Many friends of charities have benefited from a gift of land or a gift of land with a building or other structure. There are two main benefits for this gift.
Read More
Personal Planner
Gifts of Land
Many friends of charities have benefited from a gift of land or a gift of land with a building or other structure. There are two main benefits for this gift. First, there is a charitable deduction, normally for the fair market value at the time of the gift. Second, if the real estate has appreciated the gift to a qualified public charity bypasses or avoids the capital gains tax.
The combination of a substantial charitable deduction and a bypass of capital gain is an excellent double benefit. Many donors who sell other property or have substantial income will be able to use this charitable deduction to reduce their income taxes.
There are several reasons why you might consider a gift of property. You may have recently sold another property and could use the charitable deduction. If you have commercial or rental real estate, eventually your rental income increases while your depreciation is gradually reduced. With increased rents and reduced depreciation, you may have a very substantial income tax problem.
Lisa's Land and the Developers
Lisa purchased property 10 years ago for $100,000. It was vacant land in a commercial area and now has a value of $200,000. She has paid off the debt and it is now free and clear. Lisa contacted her CPA Susan because she had started to receive some inquiries about the property from a developer. The developer was interested in building a commercial building on the property.
Lisa: "I have owned this property for 10 years and it has now appreciated. With that appreciation, will I pay a large tax if I sell the property?"
Susan: "Yes, Lisa. You purchased it for $100,000 and it is now worth $200,000. You will pay the federal capital gains tax plus a state capital gains tax because you live in a state that levies that tax. You should also consider that you have already sold another property and have a very large capital gain this year."
Lisa: "Yes, I have been thinking about that other sale. With that large capital gain, I sure could use a large charitable deduction. What would happen if I give this property to charity?"
Susan: "You can transfer a property to charity the same way that you would sell the property, by signing a deed to transfer the property to the charity. The deed will be recorded and you can qualify for a charitable deduction. The $200,000 deduction would offset a substantial part of your gain. We might be able to offset the entire capital gains tax payable on the other sale that you completed earlier this year. In addition to your income tax deduction that will offset tax on that other sale, you bypass the gain on the gift of this property. With both tax benefits, you will save about $100,000."
Lisa: "Great! That's almost as much as I paid for it in the first place. Plus, I could help my favorite charity with a very nice gift this year. That sounds like just the ticket for me."
Lisa contacted her favorite charity and deeded the land to that nonprofit. She was careful to be certain that she had not signed a contract or agreed to a sale of the property before the gift. After the deed was recorded, the charity then made contact with several developers and sold the property for $200,000.
Bill's Declining Depreciation Solution
Another gift option could be a gift of a commercial property. Bill bought a small commercial building 14 years ago for $200,000. During that period of time, he paid off the debt. His CPA Tom took straight-line depreciation and his cost basis in the building is now $120,000. Fortunately, over that period of time the property appreciated to a value of $320,000.
Bill owns many rental homes and commercial buildings and receives rental income on those properties. Because he has owned them for quite a few years, the depreciation deductions are now lower and his rental income continues to go up. As a result, Bill now has a large income and pays a very large income tax.
Bill Meets with His CPA Tom to Discuss his Plans for This Year.
Bill: "You know, Tom, I keep getting better rents every year, but I now have less and less depreciation. The income taxes are going to wallop me this year."
Tom: "Yes, Bill. Because you've owned properties for quite a long period of time, your income is now much more than the depreciation and your taxes are going to be much higher."
Bill: "Well, maybe I should just give this rental home to my favorite charity. They are in the middle of a fairly large fund drive and could sure use the gift. Would that help?"
Tom: "Yes, you would receive a very substantial deduction. The current value of that building is about $320,000. That deduction could save taxes this year, and perhaps for the next two or three years. You can take that kind of charitable deduction over as many as six years. Based on your tax situation, I think you could take the deduction over about three years. This would save over $100,000 in income taxes. In addition, by giving it to charity you would not pay tax on the $200,000 of gain in that rental home, which represents a savings of another $40,000 or more."
Bill: "This sounds like a very good plan. I have been looking for ways to reduce my taxes and help my favorite charity with that fund drive. Let's go ahead and do this."
Appraisal Requirements
Lisa and Bill both decided to make gifts of property to a favorite charity. These gifts will offset the large capital gain for Lisa and the higher income for Bill. However, for a gift of property valued at more than $5,000 they will need a qualified appraisal.
Their CPAs secured the services of Arnold Appraiser. He is certified as a Member of the Appraisal Institute (MAI) and specializes in real estate appraisals. Arnold appraised both properties and gave the two CPAs the appraisals, complete with comparables and other important appraisal information.
CPA Susan and CPA Tom also had the charities and Appraiser Arnold sign an IRS Form 8283. This form is necessary to qualify them to report the charitable deductions on their tax returns.
After making these two gifts of property, Lisa and Bill enjoyed both major benefits. They saved very substantial income taxes and also bypassed the capital gain on the property that was gifted. A gift of land can be a very fine gift with great benefits both for the donors and for the charitable organization.
---------------------
SAVVY LIVING
Make Long-Term Care Coverage More Affordable
I have been thinking about getting a long-term care insurance policy, but have found the monthly premiums to be very expensive. How can I find cheaper coverage?
Personal Planner
Gifts of Land
Many friends of charities have benefited from a gift of land or a gift of land with a building or other structure. There are two main benefits for this gift. First, there is a charitable deduction, normally for the fair market value at the time of the gift. Second, if the real estate has appreciated the gift to a qualified public charity bypasses or avoids the capital gains tax.
The combination of a substantial charitable deduction and a bypass of capital gain is an excellent double benefit. Many donors who sell other property or have substantial income will be able to use this charitable deduction to reduce their income taxes.
There are several reasons why you might consider a gift of property. You may have recently sold another property and could use the charitable deduction. If you have commercial or rental real estate, eventually your rental income increases while your depreciation is gradually reduced. With increased rents and reduced depreciation, you may have a very substantial income tax problem.
Lisa's Land and the Developers
Lisa purchased property 10 years ago for $100,000. It was vacant land in a commercial area and now has a value of $200,000. She has paid off the debt and it is now free and clear. Lisa contacted her CPA Susan because she had started to receive some inquiries about the property from a developer. The developer was interested in building a commercial building on the property.
Lisa: "I have owned this property for 10 years and it has now appreciated. With that appreciation, will I pay a large tax if I sell the property?"
Susan: "Yes, Lisa. You purchased it for $100,000 and it is now worth $200,000. You will pay the federal capital gains tax plus a state capital gains tax because you live in a state that levies that tax. You should also consider that you have already sold another property and have a very large capital gain this year."
Lisa: "Yes, I have been thinking about that other sale. With that large capital gain, I sure could use a large charitable deduction. What would happen if I give this property to charity?"
Susan: "You can transfer a property to charity the same way that you would sell the property, by signing a deed to transfer the property to the charity. The deed will be recorded and you can qualify for a charitable deduction. The $200,000 deduction would offset a substantial part of your gain. We might be able to offset the entire capital gains tax payable on the other sale that you completed earlier this year. In addition to your income tax deduction that will offset tax on that other sale, you bypass the gain on the gift of this property. With both tax benefits, you will save about $100,000."
Lisa: "Great! That's almost as much as I paid for it in the first place. Plus, I could help my favorite charity with a very nice gift this year. That sounds like just the ticket for me."
Lisa contacted her favorite charity and deeded the land to that nonprofit. She was careful to be certain that she had not signed a contract or agreed to a sale of the property before the gift. After the deed was recorded, the charity then made contact with several developers and sold the property for $200,000.
Bill's Declining Depreciation Solution
Another gift option could be a gift of a commercial property. Bill bought a small commercial building 14 years ago for $200,000. During that period of time, he paid off the debt. His CPA Tom took straight-line depreciation and his cost basis in the building is now $120,000. Fortunately, over that period of time the property appreciated to a value of $320,000.
Bill owns many rental homes and commercial buildings and receives rental income on those properties. Because he has owned them for quite a few years, the depreciation deductions are now lower and his rental income continues to go up. As a result, Bill now has a large income and pays a very large income tax.
Bill Meets with His CPA Tom to Discuss his Plans for This Year.
Bill: "You know, Tom, I keep getting better rents every year, but I now have less and less depreciation. The income taxes are going to wallop me this year."
Tom: "Yes, Bill. Because you've owned properties for quite a long period of time, your income is now much more than the depreciation and your taxes are going to be much higher."
Bill: "Well, maybe I should just give this rental home to my favorite charity. They are in the middle of a fairly large fund drive and could sure use the gift. Would that help?"
Tom: "Yes, you would receive a very substantial deduction. The current value of that building is about $320,000. That deduction could save taxes this year, and perhaps for the next two or three years. You can take that kind of charitable deduction over as many as six years. Based on your tax situation, I think you could take the deduction over about three years. This would save over $100,000 in income taxes. In addition, by giving it to charity you would not pay tax on the $200,000 of gain in that rental home, which represents a savings of another $40,000 or more."
Bill: "This sounds like a very good plan. I have been looking for ways to reduce my taxes and help my favorite charity with that fund drive. Let's go ahead and do this."
Appraisal Requirements
Lisa and Bill both decided to make gifts of property to a favorite charity. These gifts will offset the large capital gain for Lisa and the higher income for Bill. However, for a gift of property valued at more than $5,000 they will need a qualified appraisal.
Their CPAs secured the services of Arnold Appraiser. He is certified as a Member of the Appraisal Institute (MAI) and specializes in real estate appraisals. Arnold appraised both properties and gave the two CPAs the appraisals, complete with comparables and other important appraisal information.
CPA Susan and CPA Tom also had the charities and Appraiser Arnold sign an IRS Form 8283. This form is necessary to qualify them to report the charitable deductions on their tax returns.
After making these two gifts of property, Lisa and Bill enjoyed both major benefits. They saved very substantial income taxes and also bypassed the capital gain on the property that was gifted. A gift of land can be a very fine gift with great benefits both for the donors and for the charitable organization.
---------------------
SAVVY LIVING
Make Long-Term Care Coverage More Affordable
I have been thinking about getting a long-term care insurance policy, but have found the monthly premiums to be very expensive. How can I find cheaper coverage?
Read More
Savvy Living
Make Long-Term Care Coverage More Affordable
I have been thinking about getting a long-term care insurance policy, but have found the monthly premiums to be very expensive. How can I find cheaper coverage?
Cost is usually the biggest factor that keeps most people from purchasing long-term care insurance - only around eight million Americans currently have a policy.
Depending on your age, health and the provisions of the policy, costs can range anywhere from $1,000 up to $5,000 a year for an individual policy that covers nursing home care, assisted living and in-home care. Fortunately, there are various cost-cutting strategies that can help you save and still get adequate coverage. Here are several to consider.
Buy young: The most basic way to get long-term care insurance at a cheaper rate is by purchasing it at a younger age. For example, a typical policy that costs a 55-year-old $1,500 a year in premiums could cost a 65-year-old $3,000. Health is another factor that can affect costs. While good health can lower your monthly payments, having a preexisting medical condition can increase your costs, or you may not be able to get insurance at all.
Sign up as a pair: Many insurers offer 20-30% discounts on premiums if you sign up at the same time as your spouse, partner or sibling.
Choose a shorter benefit period: Most people need long-term care for just under three years on average. So, by choosing a policy that covers you for two or three years, versus five or more years, it can cut your premiums by 20-40%.
Lengthen the time you pay: Most policies have 30 to 90-day waiting periods that require you to pay out-of-pocket for care before the policy kicks in. By choosing a longer wait period, it can lower your premiums 15-20%.
Lower the daily benefit: You can get a policy that pays out $100, $150, $200 per day or more, but the higher the benefit, the higher your premium. So consider a plan that covers two-thirds the daily cost and pay the other third out of savings. That could cut your premiums by about one-third.
Buy lower inflation protection: Inflation coverage protects you from the rising costs of care. Five percent compounded annually has been a common practice in the industry but it's expensive. Consider a policy that has a 3% CPI-adjusted inflation protection. This can save you 50% or more.
Get state help: Currently, 41 states have a long-term care partnership program that can help you save too. Under these programs, if you buy a long-term care policy approved by your state Medicaid agency, you can protect an amount of assets from Medicaid equal to the benefits that your policy pays out. With this program you can choose a shorter benefit period, which will lower your premiums. See aaltci.org/partnership to learn more.
Buy a hybrid policy: If the thought of paying expensive monthly premiums for long-term care insurance - which you may never use - is keeping you from buying a policy, consider one that combines long-term care insurance with either a life insurance policy or an annuity. Hybrid life insurance policies provide a death benefit for your heirs and a pool of money you can use for long-term care. Any funds you use for care are generally subtracted from the death benefit. Hybrid annuity policies generally allow you to purchase a deferred annuity, which can be used for long-term care. If you don't need long-term care, it can be redeemed for its accumulated value when it matures or left to your heirs when you die.
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.
---------------------
YOUR PLAN
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities.
Savvy Living
Make Long-Term Care Coverage More Affordable
I have been thinking about getting a long-term care insurance policy, but have found the monthly premiums to be very expensive. How can I find cheaper coverage?
Cost is usually the biggest factor that keeps most people from purchasing long-term care insurance - only around eight million Americans currently have a policy.
Depending on your age, health and the provisions of the policy, costs can range anywhere from $1,000 up to $5,000 a year for an individual policy that covers nursing home care, assisted living and in-home care. Fortunately, there are various cost-cutting strategies that can help you save and still get adequate coverage. Here are several to consider.
Buy young: The most basic way to get long-term care insurance at a cheaper rate is by purchasing it at a younger age. For example, a typical policy that costs a 55-year-old $1,500 a year in premiums could cost a 65-year-old $3,000. Health is another factor that can affect costs. While good health can lower your monthly payments, having a preexisting medical condition can increase your costs, or you may not be able to get insurance at all.
Sign up as a pair: Many insurers offer 20-30% discounts on premiums if you sign up at the same time as your spouse, partner or sibling.
Choose a shorter benefit period: Most people need long-term care for just under three years on average. So, by choosing a policy that covers you for two or three years, versus five or more years, it can cut your premiums by 20-40%.
Lengthen the time you pay: Most policies have 30 to 90-day waiting periods that require you to pay out-of-pocket for care before the policy kicks in. By choosing a longer wait period, it can lower your premiums 15-20%.
Lower the daily benefit: You can get a policy that pays out $100, $150, $200 per day or more, but the higher the benefit, the higher your premium. So consider a plan that covers two-thirds the daily cost and pay the other third out of savings. That could cut your premiums by about one-third.
Buy lower inflation protection: Inflation coverage protects you from the rising costs of care. Five percent compounded annually has been a common practice in the industry but it's expensive. Consider a policy that has a 3% CPI-adjusted inflation protection. This can save you 50% or more.
Get state help: Currently, 41 states have a long-term care partnership program that can help you save too. Under these programs, if you buy a long-term care policy approved by your state Medicaid agency, you can protect an amount of assets from Medicaid equal to the benefits that your policy pays out. With this program you can choose a shorter benefit period, which will lower your premiums. See aaltci.org/partnership to learn more.
Buy a hybrid policy: If the thought of paying expensive monthly premiums for long-term care insurance - which you may never use - is keeping you from buying a policy, consider one that combines long-term care insurance with either a life insurance policy or an annuity. Hybrid life insurance policies provide a death benefit for your heirs and a pool of money you can use for long-term care. Any funds you use for care are generally subtracted from the death benefit. Hybrid annuity policies generally allow you to purchase a deferred annuity, which can be used for long-term care. If you don't need long-term care, it can be redeemed for its accumulated value when it matures or left to your heirs when you die.
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.
---------------------
YOUR PLAN
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities.
Read More
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they had made solid investments in securities and built a sizeable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising. With retirement on the horizon, they were looking for a way to sell their highly appreciated stock, generate income for their retirement, and avoid paying high taxes.
Peter: "For many years we had supported the work of Nazarene Compassionate Ministries. Through an email from the Foundation we learned that we could make a gift of our stock to NCM and bypass the potential tax cost we were facing. I was thrilled to learn that after transferring our portfolio to a Charitable Remainder trust, the trust would sell the stock tax free."
Gail: "I liked the fact that the trust would provide us with income for our retirement years. If something happened to Peter, I would still be taken care of for the remainder of my life. We decided to give our stock to NCM and take advantage of this plan. The Foundation handled everything for us, and now our stock is being used to help us and to help ministry."
Peter: "When I heard that in addition to the other benefits we would receive a charitable deduction for the gift, I was thrilled! I think everyone nearing retirement ought to set one of these up. It's a great way to make an impact with our assets and solve our tax problems."
**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 benefits may be different, please contact us for more information.---------------------
FINANCES
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they had made solid investments in securities and built a sizeable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising. With retirement on the horizon, they were looking for a way to sell their highly appreciated stock, generate income for their retirement, and avoid paying high taxes.
Peter: "For many years we had supported the work of Nazarene Compassionate Ministries. Through an email from the Foundation we learned that we could make a gift of our stock to NCM and bypass the potential tax cost we were facing. I was thrilled to learn that after transferring our portfolio to a Charitable Remainder trust, the trust would sell the stock tax free."
Gail: "I liked the fact that the trust would provide us with income for our retirement years. If something happened to Peter, I would still be taken care of for the remainder of my life. We decided to give our stock to NCM and take advantage of this plan. The Foundation handled everything for us, and now our stock is being used to help us and to help ministry."
Peter: "When I heard that in addition to the other benefits we would receive a charitable deduction for the gift, I was thrilled! I think everyone nearing retirement ought to set one of these up. It's a great way to make an impact with our assets and solve our tax problems."
**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 benefits may be different, please contact us for more information.---------------------
FINANCES
Stocks - Costco's Earnings Disappoint Investors
Costco's Earnings Disappoint Investors
Costco Wholesale Corporation (COST) released its second quarter earnings on Wednesday, March 2. Despite an increase in members, the company's earnings fell below analysts' expectations due to a strong dollar and slow January sales.
Costco reported quarterly revenue of $28.17 billion. While this was an increase from reported revenue of $27.45 billion in the same quarter last year, it fell below consensus estimates.
"For the quarter, sales were negatively impacted by gas deflation to the tune of 80 basis points and by weakening foreign currencies relative to the U.S. dollar by minus 340 basis points," said Costco CFO Richard Galanti. Despite the disappointing results, Galanti emphasized Costco's strong membership base, noting, "We feel as comfortable today as ever about the loyalty of our members."
Net income for the quarter fell to $546 million, or $1.24 per share. Last year, Costco reported second quarter net income of $598 million, or $1.35 per share.
The day after releasing its earnings report, Costco announced that it will be raising its minimum wage by $1.50 to $13 an hour. Costco, the second largest retailer in the U.S. by revenue, is not the first retail giant to make this move. Wal-Mart and Target both raised their workers' pay due to competition in the tightening labor market and the decreasing unemployment rate. Costco's decision to bump up workers' pay marks the first time that the company has increased its minimum wage in nine years.
Costco Wholesale Corporation (COST) shares ended the week at $150.90, up 0.6% for the week.
Hewlett Packard Enterprise Beats Estimates
Hewlett Packard Enterprise Co. (HPE) reported quarterly earnings on Thursday, March 3, providing investors with its first full quarter results since HP split into two companies.
Hewlett Packard Enterprise, the division of HP that sells servers, software and consulting, announced earnings that surpassed analysts' expectations.
Hewlett Packard Enterprise revenue for the first quarter was $12.72 billion. This figure topped analysts' projected revenue of $12.68 billion, according to a consensus estimate from Thomson Reuters.
"During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble," said Meg Whitman, President and CEO of Hewlett Packard Enterprise. "We delivered a third consecutive quarter of year-over-year constant currency revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010."
Hewlett Packard Enterprise reported net earnings per share of $0.41. This result was at the top end of the previously provided outlook of $0.37 to $0.41 per share.
The division of HP into two companies occurred in October of last year. Hewlett Packard Enterprise sells commercial computer systems, software and tech services, while HP sells personal computers and printers. The change has allowed Hewlett Packard Enterprise to go head-to-head with broad-based business-technology providers such as IBM, Cisco Systems and Oracle.
Hewlett Packard Enterprise Co. (HPE) shares ended the week at $15.44, up 13.8% for the week.
Barnes and Noble Reports Mixed Results
Barnes and Noble, Inc. (BKS) announced its third quarter earnings on Thursday, March 3. The U.S.'s largest bookstore chain reported a decrease in overall revenue, but an increase in its at-store sales.
Barnes and Noble reported third quarter revenue of $1.4 billion, down 1.8% compared to the same quarter a year ago. This was in line with expectations and was partly due to store closures and a decrease in online sales.
"We are encouraged by the improved bookstore sales trends that are enabling us to close the least amount of stores since fiscal 2000," said Ron Boire, CEO of Barnes & Noble, Inc. "While we still have significant work to do to improve sales at BN.com, we are encouraged by the site's improved performance during the quarter and are making investments to drive traffic and sales."
The bookseller's net earnings for the quarter rose to $80.3 million, or $1.04 per share, from $72.2 million, or 96 cents per share, last year. After the report was released on Thursday, Barnes and Noble's shares reached a three-month high, rising 8.3% to $11.08.
The retail store division of Barnes and Noble exhibited year-over-year growth, increasing 1.3% on top of a 1.7% increase a year ago. The bookseller's in-store success is largely attributed to a higher demand for non-book merchandise, including toys, games, music, adult coloring books and gifts. However, Barnes and Noble's online business is facing stiff competition from Amazon and the Amazon Kindle, which has dominated, and nearly destroyed, Barnes and Noble's Nook products. Boire acknowledged this on Thursday and noted that, moving forward, the bookseller's top priorities are "growing bookstore and online sales, reducing retail and Nook expenses and growing our membership base."
Barnes and Noble, Inc. (BKS) shares ended the week at $11.67, up 20.0% for the week.
The Dow started the week of 2/29 at 16,634 and closed at 17,007 on 3/4. The S&P 500 started the week at 1,947 and closed at 2,000. The NASDAQ started the week at 4,585 and closed at 4,717.
Costco Wholesale Corporation (COST) released its second quarter earnings on Wednesday, March 2. Despite an increase in members, the company's earnings fell below analysts' expectations due to a strong dollar and slow January sales.
Costco reported quarterly revenue of $28.17 billion. While this was an increase from reported revenue of $27.45 billion in the same quarter last year, it fell below consensus estimates.
"For the quarter, sales were negatively impacted by gas deflation to the tune of 80 basis points and by weakening foreign currencies relative to the U.S. dollar by minus 340 basis points," said Costco CFO Richard Galanti. Despite the disappointing results, Galanti emphasized Costco's strong membership base, noting, "We feel as comfortable today as ever about the loyalty of our members."
Net income for the quarter fell to $546 million, or $1.24 per share. Last year, Costco reported second quarter net income of $598 million, or $1.35 per share.
The day after releasing its earnings report, Costco announced that it will be raising its minimum wage by $1.50 to $13 an hour. Costco, the second largest retailer in the U.S. by revenue, is not the first retail giant to make this move. Wal-Mart and Target both raised their workers' pay due to competition in the tightening labor market and the decreasing unemployment rate. Costco's decision to bump up workers' pay marks the first time that the company has increased its minimum wage in nine years.
Costco Wholesale Corporation (COST) shares ended the week at $150.90, up 0.6% for the week.
Hewlett Packard Enterprise Beats Estimates
Hewlett Packard Enterprise Co. (HPE) reported quarterly earnings on Thursday, March 3, providing investors with its first full quarter results since HP split into two companies.
Hewlett Packard Enterprise, the division of HP that sells servers, software and consulting, announced earnings that surpassed analysts' expectations.
Hewlett Packard Enterprise revenue for the first quarter was $12.72 billion. This figure topped analysts' projected revenue of $12.68 billion, according to a consensus estimate from Thomson Reuters.
"During our first quarter as an independent company, we saw the progress that comes from being more focused and nimble," said Meg Whitman, President and CEO of Hewlett Packard Enterprise. "We delivered a third consecutive quarter of year-over-year constant currency revenue growth, and excluding the impact of recent M&A activity, we saw revenue growth in constant currency across every business segment for the first time since 2010."
Hewlett Packard Enterprise reported net earnings per share of $0.41. This result was at the top end of the previously provided outlook of $0.37 to $0.41 per share.
The division of HP into two companies occurred in October of last year. Hewlett Packard Enterprise sells commercial computer systems, software and tech services, while HP sells personal computers and printers. The change has allowed Hewlett Packard Enterprise to go head-to-head with broad-based business-technology providers such as IBM, Cisco Systems and Oracle.
Hewlett Packard Enterprise Co. (HPE) shares ended the week at $15.44, up 13.8% for the week.
Barnes and Noble Reports Mixed Results
Barnes and Noble, Inc. (BKS) announced its third quarter earnings on Thursday, March 3. The U.S.'s largest bookstore chain reported a decrease in overall revenue, but an increase in its at-store sales.
Barnes and Noble reported third quarter revenue of $1.4 billion, down 1.8% compared to the same quarter a year ago. This was in line with expectations and was partly due to store closures and a decrease in online sales.
"We are encouraged by the improved bookstore sales trends that are enabling us to close the least amount of stores since fiscal 2000," said Ron Boire, CEO of Barnes & Noble, Inc. "While we still have significant work to do to improve sales at BN.com, we are encouraged by the site's improved performance during the quarter and are making investments to drive traffic and sales."
The bookseller's net earnings for the quarter rose to $80.3 million, or $1.04 per share, from $72.2 million, or 96 cents per share, last year. After the report was released on Thursday, Barnes and Noble's shares reached a three-month high, rising 8.3% to $11.08.
The retail store division of Barnes and Noble exhibited year-over-year growth, increasing 1.3% on top of a 1.7% increase a year ago. The bookseller's in-store success is largely attributed to a higher demand for non-book merchandise, including toys, games, music, adult coloring books and gifts. However, Barnes and Noble's online business is facing stiff competition from Amazon and the Amazon Kindle, which has dominated, and nearly destroyed, Barnes and Noble's Nook products. Boire acknowledged this on Thursday and noted that, moving forward, the bookseller's top priorities are "growing bookstore and online sales, reducing retail and Nook expenses and growing our membership base."
Barnes and Noble, Inc. (BKS) shares ended the week at $11.67, up 20.0% for the week.
The Dow started the week of 2/29 at 16,634 and closed at 17,007 on 3/4. The S&P 500 started the week at 1,947 and closed at 2,000. The NASDAQ started the week at 4,585 and closed at 4,717.
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Bonds - Strong Jobs Report Pushes Yields to One-Month High
Strong Jobs Report Pushes Yields to One-Month High
Treasury yields jumped Friday morning after the Labor Department reported the economy added far more jobs in February than expected.
The data released indicated that the U.S. generated 242,000 new jobs in February, beating economists' expectations of 198,000 new jobs. The 10-year treasury yield, which moves inversely to bond prices, initially soared in reaction to this positive news, gaining 3.4 basis points to reach 1.864%—its highest point since February 3. Shortly thereafter, the yields decreased slightly, as focus shifted to the news that average hourly wage decreased by 0.1%.
"It's obviously a pretty solid report. There are a few flies in the ointment that cause a little bit of concern. We had the dip in wages in the month, which is presumably a payback for gains in January," said Ethan Harris, co-head of global economics research at Bank of America Merrill Lynch. "The big story right now is the labor market just shows no sign of slowing down ... The idea the economy is slipping into recession is way over done."
The early yield spike was also influenced by predictions that the positive jobs report could keep the Federal Reserve on track to increase interest rates later this year. However, analysts speculate that the fall in wages will prevent the Fed from raising interest rates in its upcoming March meeting. Regardless of what course of action the Fed takes, Friday's jobs report has helped ease recession fears, which caused investors to abandon equities in January and seek shelter under safe-haven government bonds.
"If anything, this should go a long way in reassuring markets that the U.S. isn't headed towards a recession," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. "This [jobs report] pretty much goes to support the fact the U.S. economy continues to grow and the Fed can raise rates."
The 10-year Treasury note yield finished the week of 2/29 at 1.88% while the 30-year Treasury note yield was 2.70%.
Strong Jobs Report Pushes Yields to One-Month High
Treasury yields jumped Friday morning after the Labor Department reported the economy added far more jobs in February than expected.
The data released indicated that the U.S. generated 242,000 new jobs in February, beating economists' expectations of 198,000 new jobs. The 10-year treasury yield, which moves inversely to bond prices, initially soared in reaction to this positive news, gaining 3.4 basis points to reach 1.864%—its highest point since February 3. Shortly thereafter, the yields decreased slightly, as focus shifted to the news that average hourly wage decreased by 0.1%.
"It's obviously a pretty solid report. There are a few flies in the ointment that cause a little bit of concern. We had the dip in wages in the month, which is presumably a payback for gains in January," said Ethan Harris, co-head of global economics research at Bank of America Merrill Lynch. "The big story right now is the labor market just shows no sign of slowing down ... The idea the economy is slipping into recession is way over done."
The early yield spike was also influenced by predictions that the positive jobs report could keep the Federal Reserve on track to increase interest rates later this year. However, analysts speculate that the fall in wages will prevent the Fed from raising interest rates in its upcoming March meeting. Regardless of what course of action the Fed takes, Friday's jobs report has helped ease recession fears, which caused investors to abandon equities in January and seek shelter under safe-haven government bonds.
"If anything, this should go a long way in reassuring markets that the U.S. isn't headed towards a recession," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. "This [jobs report] pretty much goes to support the fact the U.S. economy continues to grow and the Fed can raise rates."
The 10-year Treasury note yield finished the week of 2/29 at 1.88% while the 30-year Treasury note yield was 2.70%.
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CDs and Mortgages - Mortgage Rates Halt Downward Spiral
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Mortgage Rates Halt Downward Spiral
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, March 3. The report showed a slight turn-around, as interest rates reveal the first increase in two months.
The 30-year fixed rate mortgage averaged 3.64% this week. This represents an increase from last week when it averaged 3.62%. Last year at this time, the 30-year fixed rate mortgage averaged 3.75%.
This week, the 15-year fixed rate mortgage averaged 2.94%. This was up from last week when it averaged 2.93%. The 15-year fixed rate mortgage averaged 3.03% one year ago.
"The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality," said Sean Becketti, Chief Economist at Freddie Mac. "Treasury yields approached their highest level in a month, boosting the 30-year mortgage two basis points this week to 3.6%. Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook, and the market expects the Fed to refrain from any further short-term rate increases for now."
The money market fund finished the week of 2/29 at 0.3%. The 1-year CD finished at 0.6%.
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
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Mortgage Rates Halt Downward Spiral
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, March 3. The report showed a slight turn-around, as interest rates reveal the first increase in two months.
The 30-year fixed rate mortgage averaged 3.64% this week. This represents an increase from last week when it averaged 3.62%. Last year at this time, the 30-year fixed rate mortgage averaged 3.75%.
This week, the 15-year fixed rate mortgage averaged 2.94%. This was up from last week when it averaged 2.93%. The 15-year fixed rate mortgage averaged 3.03% one year ago.
"The market turbulence that kicked off the year subsided at the end of February, providing at least a temporary break in the flight to quality," said Sean Becketti, Chief Economist at Freddie Mac. "Treasury yields approached their highest level in a month, boosting the 30-year mortgage two basis points this week to 3.6%. Despite this welcome breather, Fed officials have been highlighting the downside risks to the economic outlook, and the market expects the Fed to refrain from any further short-term rate increases for now."
The money market fund finished the week of 2/29 at 0.3%. The 1-year CD finished at 0.6%.
---------------------
To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
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The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220, United States
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