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Federal Reductions for Extension Programs

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In early January, the House, Senate and President Obama passed the American Taxpayer Relief Act of 2012 to avert the fiscal cliff. The legislation has significant implications for SNAP-Ed (Supplemental Nutrition Assistance Program Education) in Minnesota and nationwide. In addition, on March 1, President Obama signed an order that put in effect the across-the-board government spending cuts known as "sequestration." Government agencies are now beginning to cut a total of $85 billion from their budgets between now and October 1, 2013. While the full impact of the sequestration is not yet known, Extension administration is expecting and preparing for potential budget reductions. Extension is planning for an 7.9-percent reduction in federal capacity funding (Smith-Lever and other funds).

Our current funding plan is to cover these costs from Extension's reserves, which means that Extension will not have to cut positions or programs in order to cover costs in FY 2014. Thanks to our collective wise stewardship of public and private funding (including gifts made by retirees), Extension currently has the reserves available to cover these expenses. However, we will need to continue to diversify our funding sources and continue our efforts to obtain grants, gifts and fees to offer high quality programs that meet the needs of Minnesota.

Gifts to support Extension can be made online (click on Make a Gift), or mailed to the University of Minnesota Foundation (designate Extension as gift beneficiary and fund of interest), CM-3854, PO Box 70870, St. Paul, MN  55170-3854. For questions about giving, or including Extension in your estate plan, contact Jane Johnson, Extension Development Officer, at 612-626-3717 or johns350@umn.edu.

Year End Giving Options

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As you know, Extension takes University research and education into people's lives, engaging Minnesotans to address many of today's complex issues. Your gift to Extension will make a difference throughout Minnesota.

Some ways retirees have chosen to continue their support for Extension is through fully deductible charitable contributions to the following funds: Extension Dean & Director's Fund (#3419), Extension Internship Fund (#3500), Minnesota Extension Workers Scholarship Fund (#2941), and Qualey/Skjervold Extension Scholarship & Professional Development Fund (#3162).  

Gifts to support Extension can be made online (click on Make a Gift), or mailed to the University of Minnesota Foundation (designate Extension as gift beneficiary and fund of interest), CM-3854, PO Box 70870, St. Paul, MN  55170-3854.   

For questions about giving, or including Extension in your estate plan, contact Jane Johnson, Extension Development Officer, at 612-626-3717 or johns350@umn.edu.  

On April 26, the University of Minnesota Retirees Association (UMRA) and the University of Minnesota Foundation (UMF) sponsored a seminar, "The New Tax Law and Estate and Gift Planning Strategies." In response to requests from retirees who were interested in the information but could not attend, we asked for a short overview of the seminar content from Lynn Praska, UMF planned giving representative. Here are notes from Lynn on the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The Act contains a provision to extend the opportunity for donors to make qualified charitable contributions from their IRAs, which expires December 31, 2011.The rules are:

Donors must be at least 70 1/2 when the gift is made.
Distributions must be from an IRA and will satisfy the donor's minimum required distribution (MRD).
Distributions must be made directly to the charity.
Allows for an exclusion from gross income of up to $100,000 per year for otherwise taxable distributions. There is no income tax deduction involved, only the exclusion from gross income.
Gifts must be made "outright" - they cannot be used for a gift annuity or charitable remainder trust.
The Act also:

Temporarily extends the 2010 ordinary income tax rates for all individual taxpayers for two years (through 2012).
Continues lower tax rates for qualified stock dividends and long-term capital gains.
Provides a temporarytwo-year$5 million estate tax exemption with a 35 percent tax on estate assets over $5 million for persons dying before January 1, 2013.
If Congress does not act before then, the $1 million exemption and 55 percent estate tax will return in 2013.
Congress also reunified the gift and estate tax systems that were separated in 2001 so that the $5 million exemption applies to both gifts given during life and those that pass to heirs at death.
Any unused exemption carries over to the surviving spouse.
Because it is difficult to condense a two-hour seminar into bullet points, you are welcome to contact Lynn Praska directly if you have any questions about the Act, or about how to support Extension with an estate gift; she can be reached at 612-624-4158 or lpraska@umn.edu.

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