Tax Benefits

Reasons to Give to CTO

  • The number 1 reason our donors give to CTO is to help families send their children to our Catholic schools who otherwise could not afford tuition.
  • The amount they give is because of the generous Iowa tax credits

Tax Advantages to Give to CTO

As an Iowa taxpayer, you can contribute to the Catholic Tuition Organization (CTO) and receive an Iowa tax credit equal to 75 percent of your donation. A portion of the amount you contribute also qualifies as a charitable deduction when you itemize on your Federal tax return.

Sample Calculations of Tax Benefits:

Donating Appreciated Stock

DOUBLE THE TAX BENEFIT BY DONATING SHARES OF PUBLICALLY TRADED APPRECIATED SECURITIES (HELD FOR MORE THAN ONE YEAR, OF COURSE!) TO CTO AND RECEIVE THE

By donating the shares in-kind to the Catholic Tuition Organization, you eliminate the capital gains on the securities. Otherwise, the capital gain is taxed if sold first followed by a cash donation to a charity.

The Benefits of Donating Appreciated Stock to a CTO:

Example: Donating 1000 shares of stock valued at $55 per share.
Current Value:
$55,000
Original Cost of Shares:
$5,000
Capital Gain:
$50,000
BENEFIT #1
Value of Donated Security:
$55,000
Iowa Tax Credit @ 75%:
x 75%
Iowa Tax Savings:
$41,250
BENEFIT #2
Value of Donated Security:
$55,000
Less: Iowa Tax Credits
$(41,250)
Available Federal Tax Deduction
$13,750
Assuming Federal Tax Rate:
x 32%
Federal Tax Deduction:
$4,400
Total Tax Savings:
$45,650

OR...The Alternative Selling Appreciated Stock for Cash:

Value of Sold Security:
$55,000
Combined Federal & State Capital Gains Tax (24% Federal + 6% State):
$16,500
Amount Available to Donate to CTO:
$38,500
Less: Iowa Tax Credits @ 75%:
$28,875
Federal Tax Redution:
$9,625
Assuming Federal Tax Rate:
32%
Federal Tax Reduction:
$3,080
Total Tax Savings:
$31,955
Ask your tax advisor about your tax benefits when donating to a CTO.

Additional Tax Benefits

For C-Corps: On your federal return, 75% of your donation is a regular business expense and 25% is a charitable donation.

Appreciated Stock: Donors do not pay capital gains tax when the appreciated sotck is given directly to CTO.

Any tax credits exceeding your current year Iowa Tax liability can be carried forward for up to five years.

All donors should seek advice from their tax planner to determine the tax benefits applicable to their situation.

How to Contribute

The Donation Form is used for all pledges or contributions for any type of donor. Your social security or tax identification number is required in order to issue tax credits.

Pledge – you can pledge online or send in your pledge using the donation form.

Check – use the donation form and mail to CTO along with your check.

Credit Card – you can contribute online through this secure website or mail the donation form with your card information.

Stock – use the donation form to indicate you are donating stock and notify CTO of the name of the stock and number of shares donated

Ways to Contribute

Total tax credits available each year are limited and are provided to donors on a first-come basis. We ask all pledges are paid no later than December 15th. After December 15th, reserved tax credits are released and available to any donor. To pledge, please Pledge Online or download 2021 Donation & Pledge Form.

The bottom line?  It's for the kids...
and their futures!
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