Originally Posted by
kab1one
Enlighten to the scam?
About 6 years ago ND established a tax credit for a contribution to a qualified endowment. Which most charitable organizations have ( or non profits).
You donate $5k. North Dakota gives you a $2k credit.
This is in addition to the $5k deduction. 35% tax bracket. So additional savings of $1,750. At this point the $5k deduction is $1,250 out of pocket.
Take step further instead of giving cash, give appreciated asset. I will use Microsoft stock for example. Some people have low tax basis in the stock. In some cases $500, by giving stock instead of cash, you have saved an additional $1,000. ($4,500 of non recognized gain at 22%). So at this point the gift to the endowment cost nothing. Many companys will match the gift. So all of a sudden you can have a 10k endowment for zero.
I understand many don't want to gift to an endowment, many want to funds to go to current obligations. Thus, have the person making the gift, do the endowment and contribute the tax savings. Double whammy.
And I do fine from a business perspective, thank you very much.