Tax Advantages

Federal law and the laws of many states recognize and reward charitable giving. Because each situation is different, individuals are urged to consult their own advisors.

Federal tax advantages

  • Cash Gifts - Under federal law, gifts of cash (or equivalent) are deductible although limits do apply. If the value of a gift exceeds the deduction limit, the excess may be carried forward and deducted in the five tax years following the gift.
  • Non-Cash Gifts - Federal law allows a deduction for non-cash charitable contributions, within limits. However, IRS reporting rules must be followed to secure a charitable deduction. Except in the case of publicly traded securities, if you claim a deduction of $5,000 or more the IRS requires you obtain a "qualified appraisal" and submit the necessary information on the income tax return.

Montana state tax advantages

College Contribution Credit

Under state law, individuals who contribute to MSU are eligible for a tax credit as well as the allowable charitable deduction. The credit is equal to 10% of your gifts to MSU, not to exceed $500.

Montana Endowment Tax Credit

Since 1997, Montana law has provided a special tax credit for certain types of gifts to an endowment with the MSU Alumni Foundation or other nonprofit organization. The amount of the credit and how it is earned varies depending on the type of taxpayer making the gift. Download the Montana Endowment Tax Credit form here.

  • Individuals - Those who create a planned gift to a permanent endowment at the MSU Alumni Foundation are eligible for a tax credit equal to 40% of the qualifying contribution, not to exceed $10,000. Gifts that qualify include:
    • Charitable Gift Annuity
    • Charitable Remainder Trust or Charitable Lead trust
    • Retained Life Estate on Real Estate
    • Paid Up Life Insurance Policies
  • Estates, Businesses & Corporations - Estates, "C" corporations, "S" corporations, partnerships, and limited liability companies qualify for the credit as well. For businesses, the credit passes through to the partners or shareholders in proportion to their ownership shares.
    • Outright gifts to endowments qualify for a credit of 20% of the charitable gift, up to $10,000.
    • Planned gifts to endowments qualify for a credit of 40% of the qualifying contribution, up to $10,000.

The credit must be used in the year of the gift and may not exceed the taxpayer's income tax liability. Any excess credit may be used as a deduction against Montana income tax liability.

This information is for illustration purposes only and does not constitute legal, accounting, tax, or other professional advice. Individuals are urged to discuss actual benefits with their own professional advisors. For questions about gifts to the MSU Foundation, contact Tyler Wiltgen, Sr. Director of Development at 800-457-1696.