Tradition...For 40 years Unified Health Solutions has provided quality programs for the neediest in the Dayton area. We have achieved excellent results with our Prevention, Intervention and Self-Sufficiency programs. We collaborate with other non-profits, school districts, government agencies and others who have an interest in the excellent results our staff has been able to achieve over the years. UHS continues to build on those strengths -- its vision, mission and solid record of results -- to make the transformation necessary to compete in the 21st century. That tradition, supported by other non profit collaborators, makes UHS unique. Our challenge is to change with the ever increasing demands for our services and grow even stronger. When you think of UHS, you probably first think of our programs and those we assist—over 5000 individuals and families in an average year. Yet, there are many people who make UHS successful whom you might never see. Such is the case for many of the caring people who make generous gifts to UHS on an annual basis or in other ways.

Looking to the Future...You, too, can become an important part of our future. This site is dedicated to providing creative ideas for you to use in supporting our mission. Our purpose is to point out current developments which may be helpful in your financial and estate planning. Through wise planning, you may be in a better position to assist UHS in providing program excellence. You should, of course, consult your own advisors as to the applicability of any item to your own situation. Also, to view UHS's financial information, please visit www.guidestar.org.

Gifts of Cash
The most popular type of charitable gift is a gift of cash. It's easy to do. A gift of cash is considered made on the date it is hand-delivered or postmarked. Gifts of cash are deductible up to 50% of a donor's AGI (adjusted gross income). Any excess deduction can be carried over for five additional years.

You can make a one time or annual contributions through our UHS Partners Program. Checks can be made payable to UHS and sent c/o Bill Feldmann, 184 Salem Ave., Dayton, OH 45406.

In-Kind Contributions
You can make an in-kind contribution that benefits our children. As an example, a local attorney purchased tickets for the annual Muse Machine Musical at the Victoria Theatre. Many of the children we serve attended an event they might not otherwise been able to see. Just contact Bill Feldmann (937-220-6602 or bfeldmann@uhs-dayton.org) for ideas and suggestions.

Gifts of Appreciated Property
A viable alternative to a cash gift is a gift of property. With careful planning, charitable gifts of certain types of assets will provide even greater tax benefits to the donor than a cash gift of equivalent value. The most favorable tax benefits are generated by contributions of appreciated, long-term, capital-gain securities and real estate. Reason: In addition to receiving a charitable deduction for the full fair- market value of such a gift, the donor escapes any potential tax on the capital-gain element of the gifted property.

The full fair-market value of gifts of long-term, capital-gain securities or real estate is deductible up to 30% of a donor's AGI. Any amount in excess of the 30% ceiling can be carried forward for five years.

Property that has declined in Value: A donor considering a gift of property that has gone down in value would be better off selling the property to realize a deductible loss and then contributing the proceeds to charity and obtaining a charitable deduction. This process assures recognition and deductibility of the loss.

Tax benefits and a high level of a steady, reliable stream of payments have long made charitable gift annuities a favorite giving vehicle of older people - - especially those past the so-called "accumulation stage" of life who are not as concerned with increasing assets as with finding ways to ensure an income they can't outlive.

What is a gift annuity?
As the name suggests, it is part gift -- a contribution of money or property to the charity of your choice—and part annuity—an arrangement under which the charity agrees to pay your designated annuitant(s) fixed payments for life. These payments are backed by the full assets of the charity. At the death of the last beneficiary, the charity receives the funds remaining in the annuity account.

The gift component is very important because it generates two significant tax benefits:

• Since a porion of the gift is treated as a charitable contribution, the donor gets an immediate income-tax deduction to help offset current income.
• If long-term capital-gain property is used to fund the gift annuity, then part of the gain escapes taxation and the rest is spread over the donor or annuitant's life expectancy.

In addition to the tax benefits, people are often attracted to the gift annuity for other, less obvious, reasons:

• A donor can establish a gift annuity with a relatively small sum of money.
• There is no need to make a new will. The procedure to establish a gift annuity is straightforward and uncomplicated.
• Because a donor can receive payments from his or her gift, the gift annuity enables a person of modest means to make a gift during his or her lifetime without financial sacrifice.

What the gift annuity means too many donors is the security of a generous, regular, non-fluctuating stream of payments -- an end to the dramatic swings the financial marketplace has seen in the last several years.

How are the rates paid for charitable gift annuities determined?
All charitable organizations are free to set the rates they offer, as long as the rates comply with applicable state regulations. Unified Health Solutions chooses to follow the schedule of recommended maximum rates published by the American Council on Gift Annuities. These rates change from time to time, based on a variety of economic factors.

Can a gift annuity have more than one beneficiary?
Yes. A charitable gift annuity can be created to pay one or two annuitants for life. If you choose a beneficiary other than your spouse, you may need to consider gift-tax consequences.

How is the charitable deduction determined?
The charitable deduction is equal to the difference between the amount of the contribution and the value of payments to the annuitant(s). Deductions are lower for younger persons since they likely will live longer. Similarly, deductions are lower when there are two annuitants rather than one.

How are the gift annuity payments I receive taxed?
For tax purposes, a gift-annuity contribution is treated as part gift and part purchase of an annuity. The part that is treated as a gift is the amount that is deductible the year you create the gift annuity. The balance is treated as the purchase price of the annuity. It is treated as a return of your original investment and comes back to you tax-free over your life expectancy.

Can I give stock in exchange for a gift annuity?
Yes. If you own stock for more than 12 months, any gain you realize on its sale would be treated as long-term capital gain and would be subject to rates in effect for such. If, instead of selling this appreciated stock, you use this stock to fund a gift annuity and retain annual payments for yourself, only a portion of the gain would be taxable and you would be allowed to recognize that portion of the gain in equal amounts over your life expectancy. If you designate someone other than yourself to receive the annual payments, the amount of the gain you must recognize is still reduced if compared to a sale, but you must recognize all of it in the year you create the gift annuity.

How do returns on gift annuities compare with returns on regular investments?
It is important to remember that a charitable gift annuity is a charitable giving plan. It is not an investment. However, if annual net spendable cash flow is a major objective for you, a charitable gift annuity compares quite favorably with regular investments.

Such charitable gifts are of great long-term benefit to Unified Health Solutions, as they enable us to plan for the future. They are of immediate benefit to you, however, as they enable you to make a charitable gift now and, at the same time, receive much-needed annual payments for life.

Future Gifts to Benefit UHS
You may not be able to make a current contribution, but would like to help UHS through your Estate Plan. UHS is a collaborating partner of the Dayton Foundation’s Endowment Program. The Family First Legacy Society was created for just this purpose. There are a variety of ways to make future gifts to UHS, many with significant tax benefits. See some of the vehicles listed below or contact Bill Feldmann (220-6602 or bfeldmann@uhs-dayton.org), and he will see that your name is added to the Society’s mailing list so you receive information that will benefit you and your family.

Charitable Bequests
When you think of making a gift to charity in your will, the outright bequest usually comes to mind first. With such a bequest, you simply direct in your will that your entire interest in certain money or property be transferred to a designated charity. Of course, your estate will be entitled to a charitable deduction for the full, fair-market value of your gift.

An outright bequest can take various forms. The following brief descriptions of several types of bequests may be helpful to you as you plan your estate:

General Bequest
A General Bequest is probably the most popular type of charitable bequest. With this, you simply leave a specified dollar amount to Unified Health Solutions. For example, a bequest of $10,000 is a general bequest.

Specific Bequest
A Specific Bequest is another popular way to benefit Unified Health Solutions. With such a bequest, you designate specific property that you want us to receive. For example, a bequest of a specified stock or a vacation home is a specific bequest.

Residuary Bequest
A Residuary Bequest is used to give UHS all, or a portion of, one's property after all debts, taxes, expenses, and all other bequests have been paid. For example, giving UHS "the rest of the property that I own at my death" is a residuary bequest. It may augment a general or specific bequest to UHS if the size of the estate allows, after assuring that other beneficiaries receive their bequests prior to distribution to the charity.

Percentage Bequest
A Percentage Bequest is expressed as a percentage of an estate or residuary estate. For example, a donor might leave UHS 50% of the residuary estate. If fortune changes the size of the estate over the years, this bequest will change in the same proportion.

Contingent Bequest
A Contingent Bequest is a provision in your will that provides for the situation where a beneficiary dies before you or disclaims the property. To prepare for such an occurrence, consider naming Unified Health Solutions as the contingent beneficiary. This will ensure that the property will pass to us in one of these situations rather than to unintended beneficiaries.

When remembering us as a beneficiary in your will, trust agreement, insurance policy or retirement plan, please use our legal title:

The charitable remainder trust is similar to other types of trusts except that the amount distributed at its termination (the remainder) is paid to a charitable beneficiary. A donor transfers property irrevocably to a trust and specifies: the amount of payments to be distributed, to whom the payments are to be paid, the duration of the payments (a period of years or the lifetime of the beneficiaries), and the charity that will receive the remainder.

This plan may become effective through outright transfers during the donor's lifetime or through transfers at death under the owner's will. To qualify for the charitable deductions available under federal tax law, the plan must conform to the requirements of a charitable remainder unitrust or a charitable remainder annuity trust. Each of these arrangements offers independent features that can be used effectively to achieve financial- and estate- planning objectives.

An important feature common to all these arrangements is that they offer an escape from the age-old investment dilemma of the "locked-in" position: an investor may want to dispose of an investment position for various reasons, but is hesitant to do so because of the potential capital-gain tax on the appreciation. Funding a charitable remainder trust with appreciated, long- term, capital gain securities can increase the available tax benefits because the grantor can avoid the potential capital-gain tax that would result from an outright sale of the property. Avoidance of the capital-gain tax, coupled with a current charitable income-tax deduction can substantially reduce the cost of such a transfer.

Unitrust
The primary feature of the unitrust is that it provides for payment to the beneficiary of an amount that may vary over time. The payment must equal a fixed percentage of the net fair-market value of the trust assets as valued annually. The grantor determines the fixed percentage upon creation of the unitrust; it must be at least 5%. Depending on the donor's financial-planning objectives, a choice may be made to emphasize the charitable deduction (by choosing a lower rate) or the annual return (by selecting a higher rate). The unitrust payment must be made at least annually to the current beneficiary, but may be made at more frequent intervals, such as semi-annually or quarterly. The unitrust may be set up for the lives of the beneficiaries or for a term of years not exceeding 20. The amount paid to beneficiaries each year is determined by multiplying the payout rate by the value of the trust assets. For example, a 6% unitrust valued at $100,000 its first year will pay out $6000. If the trust assets are valued at $110,000 in its second year, the payout will be $6,600. The variable nature of the unitrust payments may provide a hedge against inflation -- assuming a growth in value of the trust assets comparable to the inflation rate.

The grantor is allowed a charitable deduction equal to the present value of the charitable organization's remainder interest in the unitrust, as determined by reference to U. S. Treasury Regulations. The deduction, a percentage of the amount that funds the trust, is based on the fair-market value of the asset transferred, the payout rate chosen, and either the age and number of beneficiaries or the term of years.

The unitrust can be funded with cash or -- ideally -- with long-term, highly appreciated, capital-gain securities or real estate. The governing instrument of any unitrust may include a provision to permit additional contributions. The attraction of this feature is that the grantor need not establish a new trust each time he or she wishes to make an additional gift.

Annuity Trust
The annuity trust shares many common features with the unitrust, the principal difference being the manner of calculating the payment to the beneficiary. Whereas the unitrust provides for a payout that may vary, the annuity trust provides for a fixed payout. This amount must equal a sum certain of not less than 5% of the initial fair-market value of the gift in trust. Another difference is that an annuity trust cannot permit additional contributions. A deduction for the present value of the charitable remainder interest and avoidance of capital-gain tax on the transfer of appreciated, long-term, capital-gain property are among the benefits available to the grantor of the annuity trust. The fixed-payout feature of the annuity trust may make it particularly suitable to meet the financial needs of an older beneficiary. Income-producing securities or cash are most suitable for funding an annuity trust.


Most people own some form of life insurance. An important, but frequently overlooked, role of life insurance is the one it can play in planned charitable giving.

Primary Beneficiary
A donor can name Unified Health Solutions as the primary beneficiary of a life insurance policy. The donor retains ownership of the policy and has access to the policy's cash value. Although the face value of the policy will be includible in the donor's gross estate, no federal estate-tax liability will result because of the charitable deduction. Since the donor retains ownership of the policy, no income-tax charitable deduction is allowed for the value of the policy upon designation of the charity as the beneficiary or for subsequent premium payments.

Successor Beneficiary
A donor can also name a charity as a successor beneficiary to receive the proceeds in the event the primary beneficiary(ies) are no longer living. Once again, should the proceeds be paid to the charity, the donor's gross estate will be allowed an estate-tax charitable deduction.


Capturing the Benefits of Appreciated Stock Through Charitable Planning
With the recent turbulence in the stock markets, investors are concerned about the market turning against them, and they are concerned about ways to capitalize on their good fortune without paying a heavy price in the form of a tax on capital gain.

Recent tax-law changes have eased the capital-gain-tax burden. But, Washington still may extract as much as 15% of your profits when you sell your appreciated securities.

What options do you have to benefit from the full value of your appreciated investments?
It is surprising to many people that some of the best strategies for reaping the benefits of highly appreciated securities are available through charitable planning. Although most people think of giving cash when they think of making a gift to Unified Health Solutions, many donors discover they generate even better benefits if they give long-term appreciated stock. These benefits may include both greater tax savings and, in regard to other planning goals, increased cash flow.

Why would you want to give stock instead of cash?
You receive a double benefit from contributing long-term appreciated stock:

• 1. You receive a charitable income-tax deduction for your gift.
• 2. You avoid paying capital-gain tax on the paper gain. (The new tax law has changed the maximum capital-gain-tax rate to 15% for stock held more than 12 months.)

Your stock is worth a lot more than what you paid for it. Wouldn't you get a higher deduction if you gave cash?
No, not at all. As long as you have held the stock for more than 12 months, you can deduct the full fair-market value of the stock at the time of your gift, regardless of how much you paid for it. If, for example, you donate publicly-traded securities valued at $40,000, purchased several years ago for $10,000, your deduction will be the full $40,000 value.

Can you take the entire deduction in the year you make the gift? That depends on the size of your gift and the amount of your adjusted gross income (AGI). With gifts of long-term appreciated securities, your charitable deduction is limited to 30% of your AGI. Assuming your only contribution is the $40,000 in securities and your AGI is $100,000, your deduction will be limited to $30,000 for the year of the gift.

Will you lose the deduction amount that you can't use because of the 30% limitation?
It's unlikely, since the unused portion can generally be carried forward and deducted for up to five additional years. In the example above, you could deduct the remaining $10,000 of the deduction in the next year, assuming your AGI and other gifts are at levels that permit the deduction. Current gifts are deductible ahead of the unused deductions carried over from prior years.

What effect does a charitable deduction have on your taxes?
The charitable deduction reduces your federal income-tax liability. The tax savings generated by a charitable deduction depends on your marginal tax bracket. If you are in the 28% bracket, for example, a $40,000 deduction will save you $11,200 in taxes ($40,000 x 28%). Ignoring any other savings, this will reduce the after-tax cost of your $40,000 gift to $28,800 ($40,000 - $11,200).

Can you expect other tax savings when you make a gift of long-term, capital- gain securities?
Yes. As mentioned earlier, you obtain a double benefit when you make a contribution of appreciated stock. In addition to the charitable deduction, you also avoid capital-gain tax on the stock's appreciation. With capital gains taxed at a rate as high as 15%, you can realize substantial savings. For example, if you sell for $40,000 a block of securities that cost you $10,000, you will pay a capital-gain tax of $4,500 on the $30,000 appreciation at the 15% capital-gain-tax rate ($30,000 x 15%). If, however, you contribute the property to the University of Dayton, the capital-gain-tax savings combined with the $11,200 in tax savings from the charitable deduction will reduce your after-tax cost of the $40,000 to $24,300 ($40,000 - $11,200 - $4,500).

Although most of your investments have done well, what if you have one stock that has not performed well?
It is worth quite a bit less than what you paid for it. Should you consider using it to make a charitable gift? No. It would be better for you to sell the investment and use the cash proceeds for your gift. If you sell the stock, you can recognize any loss you incur on the sale to offset other capital gain and, in some cases, ordinary income. However, if you make a gift of the stock, you can take a deduction for whatever it is worth at the time of your gift, but you cannot recognize or benefit from the loss.

The double benefit of a charitable deduction and avoidance of capital-gain tax for an outright gift of appreciated stock is very appealing. However, what if you need income?
Is it possible to donate stock and retain income? Yes. With several arrangements you can transfer the securities now and receive a stream of payments for yourself and/or another beneficiary either for life or a term of years. The size of the payments you receive depends on the plan you choose. With some plans you have the security of fixed payments; with others, variable payments that may income over time.

If you receive payments, do you still receive tax benefits?
In most instances you are entitled to a charitable deduction for the value of the remainder that will pass to charity. This will be less than the face value of the securities, but still may be substantial. You also avoid tax on the capital gain just as you would by giving them outright. With some gift plans, you will be taxed on part of the appreciation, but only as you receive the payments.

Can a gift of appreciated securities actually increase your spendable income?
Yes. Many investors become frustrated because their stock pays little or no income and they may feel "locked in" because converting assets to income- producing property would entail paying a significant capital-gain tax. Only after-tax sale proceeds would be available for reinvestment. However, when you transfer appreciated stock for a gift arrangement that provides you with a stream of payments for life, all proceeds, since you avoid tax on the capital gain, are preserved to generate the payments.

As a result, your spendable cash may not only be more than you were receiving from the stock but also more than you would receive if you sold the stock and reinvested the proceeds yourself.


Good news! There are new proposed Regulations that will affect distributions from IRAs, annuity contracts, 403(b) plans, and qualified retirement plans. Assuming, as expected, that they are adopted, they will apply to calendar years beginning on or after January 1, 2002. For IRA distributions in calendar year 2001, you can either rely on the new rules or follow the existing ones. As to distributions from qualified plans, the plan must be amended before you can use the new rules.

How the New Rules Could Benefit You
You would no longer have to make a choice among three methods for calculating the minimum required distributions from your IRA or qualified retirement plan. While the new rules would not change the deadline for starting the distributions (April 1 following the year you attain age 70½), they would provide a single, quite favorable computation method.

Your choice of beneficiaries under the new rules would have no effect on the minimum distributions from your IRA or other qualified retirement plan. Whether you name a 30-year-old, an 80-year-old, or a charity as beneficiary, the amount you are required to withdraw each year is the same. Under the new rules, after starting withdrawals and until you die, you could substitute or add beneficiaries without affecting the minimum withdrawal schedule.

Your beneficiaries would have attractive new options for receiving benefits. Depending on their circumstances following your death, some of them might elect to disclaim their interests, some might choose to be cashed out, and others might prefer to receive payments for life. Each beneficiary can choose how to receive benefits as late as December 31 of the calendar year following the year of your death.

The minimum amount you must withdraw from your account would probably be reduced. That is because the withdrawal period under the new rules would be the joint life expectancy of you and a beneficiary who is presumed to be ten years younger than you. The only exception to this new uniform withdrawal schedule is if your spouse is more than ten years younger. Then you can use your actual joint life expectancy.

Taking less out of your account leaves more to continue growing on a tax- deferred basis, which allows you to accumulate more for heirs or for your own future needs.

New Rules Don't Eliminate Double Taxation of Funds
Distributions from IRAs and qualified retirement plans will continue to be subject to income tax. The tax is paid by the recipient - by you while you are receiving payments, by your beneficiaries following your death.

In addition to income taxes, the assets of IRAs and qualified retirement plans may be subject to estate tax. The fair-market value of these assets will be included in your estate and, along with all other estate assets, will be taxed if your total estate exceeds the amount that can be exempted. In the event your spouse is your only beneficiary, your retirement funds will qualify for the estate-tax marital deduction and, consequently, will not be taxed on your estate-tax return. However, any funds remaining in the account at your spouse's death will be includible in his or her estate and may be subject to estate tax at that point. Your beneficiaries are entitled to an income-tax deduction for the amount of the net federal estate tax paid on the funds they receive.

Even so, the combination of income and estate taxes could total more than 70 percent of your accumulations, depending upon applicable tax rates. Although possible income- and estate-tax reductions would provide some relief, IRAs and qualified retirement funds are likely to continue to be the most heavily taxed assets that you can leave to heirs.

Using IRAs and Qualified Retirement Funds for Charitable Gifts
Under the new rules, it makes more sense than ever to use IRAs and other retirement funds for your end-of-life charitable gifts. As before, you will likely save more taxes when you give these assets than you would if you gave securities, real estate, or cash. But now there is the added benefit of simplicity.

Consider first the continuing tax benefits. The funds from the IRA or qualified retirement plan that you leave to charity (such as Unified Health Solutions) qualify for an estate-tax deduction and avoid income taxes because the charity is tax-exempt. Thus, you can make a significant charitable gift at relatively little cost to your heirs.

Under the new rules, all you have to do is name the charity as beneficiary of a portion of your IRA or qualified retirement funds. Following your death, that portion of leftover funds will be paid to the charity in a lump sum, totally tax-free. The balance can be paid to beneficiaries according to whatever schedule you and they elect, and the charitable gift will not affect that distribution schedule. If family circumstances change, you can alter the percentages by completing a beneficiary designation form. This does not necessitate a change in your will.