A Guide to Making a Gift of Stock

Amplify Your Impact Through Appreciated Securities

Donating publicly traded stock is one of the most tax-effective ways to support Central Music Academy. By gifting securities directly to CMA, you can significantly increase the value of your contribution while realizing substantial tax savings for yourself.

Why Give a Gift of Stock?

• Eliminate Capital Gains Tax: When you donate stock that has increased in value (and that you have held for more than one year), you do not have to pay capital gains tax on the appreciation.

• Full Fair Market Value Deduction: You can typically claim a charitable income tax deduction for the full fair market value of the shares at the time of the gift, regardless of what you originally paid for them.

• Give More for Less: Because you are avoiding the tax you would have paid if you sold the stock first, you can often make a larger gift to CMA than you could with a cash donation.

Step-by-Step Instructions

1. Consult Your Advisor We recommend speaking with your financial advisor or tax professional to determine which securities in your portfolio are the most advantageous to donate.

2. Initiate the Transfer Contact your broker to initiate a "DTC Transfer" (Depository Trust Company). Your broker will need the following information to move the shares to Central Music Academy’s account:

• Recipient Organization: Central Music Academy

• Organization Address: 3295 Eagle View Lane, Lexington, KY 40509

• Tax ID (EIN): 61-1466695

• Brokerage Account Details:

  Broker: LPL Financial

  DTC #: 0075

  Account Number: 4926-1890

3. Notify Central Music Academy Security transfers often arrive in our account without the donor’s name attached. To ensure we can properly track and acknowledge your gift, please notify Assistant Director Michelle Clouse at (859) 221-2190 or michelle.clouse@centralmusicacademy.org with the following details:

• Your name and address

• The name of the stock and the number of shares being transferred

• The date you initiated the transfer

Important considerations

The "Hold" Rule: To maximize your tax benefits, the stock must have been held for more than one year. If you have held the stock for less than a year, your deduction is typically limited to your "cost basis" (what you paid for it).

Do Not Sell First: To avoid capital gains tax, the shares must be transferred directly to CMA. If you sell the stock and donate the cash, you will still be liable for the tax on the gain.

Valuation: For tax purposes, the value of your gift is usually the average of the high and low trading prices on the day the stock is officially received in CMA’s account.

Disclaimer: Central Music Academy is not a tax or financial advisor. This webpage is for informational purposes only. Please consult with a qualified professional before making any financial decisions.

A Guide to Qualified Charitable Distributions (QCDs)

Support CMA Directly from Your IRA

At Central Music Academy (CMA), our mission is to provide high-quality, tuition-free music education to local students. When you support CMA through a Qualified Charitable Distribution (QCD), you are not just making a tax-smart financial decision—you are giving a student an instrument, a community, and a future.

What is a QCD?

A QCD is a direct transfer of funds from your Individual Retirement Arrangement (IRA), payable directly to a qualified 501(c)(3) nonprofit organization, such as Central Music Academy.

Why Give a QCD?

If you are 70½ or older, a QCD is one of the most tax-efficient ways to support the causes you care about:

• Meet Your RMD: The QCD amount can count toward satisfying your Required Minimum Distribution (RMD) for the year, up to $111,000 per person (in 2026).

• Tax-Free Transfer: The distribution is excluded from your taxable income. This can be more beneficial than a traditional deduction, especially if you do not itemize deductions on your tax return.

Streamlined Giving: It allows you to put your retirement savings to work immediately, seeing the impact of your gift in the community today.

Step-by-Step Instructions

1. Consult Your Tax Professional -  Before making any financial decisions, consult with your financial advisor or tax accountant to ensure a QCD is the right strategy for your situation and that the transfer will meet IRS requirements.

2. Contact Your IRA Custodian - Notify your IRA plan administrator (e.g., Fidelity, Vanguard, Schwab) that you wish to make a "Direct Charitable Distribution" to Central Music Academy. Crucially, the check must be made payable directly to Central Music Academy, not to you.

3. Provide CMA’s Information - Your custodian will need the following information to process the gift:

Payee: Central Music Academy, Inc.

CMA Address: 3295 Eagle View Lane Lexington, KY 40509

CMA Tax ID (EIN): 61-1466695

4. Request Notification - While many checks arrive with the donor’s name, some do not. To ensure we can properly thank you and provide a correct receipt, please ask your custodian to include your name and address on the check memo or in an accompanying letter. If your custodian will not include this info, please notify us directly that the distribution is on the way.

Important considerations

Eligibility: You must be at least 70½ years old at the time of the distribution.

The Check: The check must be issued directly from the IRA to Central Music Academy. Do not withdraw the funds yourself, as this will result in a taxable event.

Receipts: When we receive your gift, Central Music Academy will send you a specialized receipt acknowledging that the gift was made via a QCD. This receipt is different from a standard donation receipt and must be retained for your tax records.

Deadline: To count for the current tax year, the funds must leave your IRA account by December 31st. We recommend initiating the transfer at least four weeks before the deadline.

Disclaimer: Central Music Academy is not a tax or financial advisor. This webpage is for informational purposes only. Please consult with a qualified professional before making any financial decisions.

A Guide to Donor-Advised Funds (DAFs)

Support CMA Through Your Charitable Investment Account

A Donor-Advised Fund (DAF) is a powerful way to manage your charitable giving. If you have already established a DAF, you have already taken the first step toward making a lasting impact. By recommending a grant to Central Music Academy (CMA), you turn those invested funds into music lessons and mentorship for our students.

Why Give from Your DAF?

• Immediate Impact: You’ve already received the tax benefit when you contributed to your DAF. Recommending a grant now allows you to see your generosity in action immediately.

• Ease of Use: DAF grants are one of the simplest ways to give. Most can be handled online through your fund’s donor portal in just a few clicks.

• Strategic Philanthropy: Using your DAF allows you to support CMA's long-term sustainability without affecting your personal monthly budget or cash flow.

Step-by-Step Instructions

1. Log In to Your DAF Provider Access your account through your provider’s website (e.g., Blue Grass Community Foundation, Fidelity Charitable, Schwab Charitable, Vanguard Charitable, or another local community foundation).

2. Recommend a Grant Navigate to the "Grant" or "Give" section of your portal. You can search for us using our legal name or Tax ID:

• Legal Name: Central Music Academy, Inc.

• Tax ID (EIN): 61-1466695

3. Set the Amount and Purpose Specify the amount you wish to grant. Under "Purpose" or "Designation," you may select "Unrestricted" to support our greatest needs.

4. Choose Your Recognition Preference You can choose to remain anonymous, but we would love the opportunity to thank you! If you share your contact information with us through the portal, we can keep you updated on the specific impact your gift is making.

Important considerations

The Receipting Process: Because you received a tax deduction when you originally contributed assets to your DAF, you will not receive a second tax-deductible receipt from CMA. Instead, we will send you an acknowledgment letter to express our deep gratitude and confirm the arrival of the funds.

Legacy Giving: Many donors choose to name Central Music Academy as a "Successor Beneficiary" of their DAF. This ensures that any remaining funds in your DAF will continue to support music education for generations to come.

No Personal Benefit: Per IRS regulations, DAF grants cannot be used to pay for items that provide a personal benefit, such as gala tickets, auction items, or memberships with non-deductible benefits.

Disclaimer: Central Music Academy is not a tax or financial advisor. This webpage is for informational purposes only. Please consult with a qualified professional before making any financial decisions.

A Guide to the Endow Kentucky Tax Credit Program

Double the Benefit: Invest in CMA’s Future While Reducing Your State Taxes

The Endow Kentucky Tax Credit program allows Kentucky taxpayers to receive a state tax credit of up to 20% of their gift to a permanent endowment. By contributing to the Central Music Academy Endowment at Blue Grass Community Foundation, you ensure that tuition-free music education remains available for Lexington’s youth in perpetuity.

Why Participate in Endow Kentucky?

• Tax Credit vs. Deduction: This is a tax credit, which lowers your tax bill dollar-for-dollar regardless of your tax bracket. You may also still be eligible for a federal charitable gift deduction.

• Significant Savings: Eligible donors can receive a Kentucky income tax credit of up to 20% of the gift value, with a maximum credit of $10,000 per taxable year.

• Carry Forward: If you cannot use the full credit in one year, it may be carried forward for up to five years.

• Flexible Giving: While there is no minimum gift size to qualify for the credit, the maximum gift allowed under this specific program is $50,000.

• Qualified Assets: In addition to cash, you can contribute publicly traded securities, IRA qualified charitable distributions (QCDs), and even real estate.

The Application Process: "Apply Before You Give"

To secure your credit, you must follow a specific sequence. Do not send your gift until you receive preliminary approval from the Kentucky Department of Revenue (DOR).

1. Prepare Your Application Early - A $1 million tax credit pool becomes available every July 1. Applications received between July 1 and July 7 receive a prorated portion of the pool; thereafter, credits are allocated first-come, first-served. Access an application here.

2. Submit Your Application (Starting July 1) - The DOR will not accept applications before July 1. Applications can be submitted via email, fax, or hand-delivery—do not mail them. You can submit directly to the DOR or send your application to BGCF by July 1, and they will submit it on your behalf.

3. Wait for Approval - The DOR typically sends an approval letter via secured email or certified mail within three weeks of your application.

4. Make Your Gift Within 30 Days - Once approved, you must make your contribution to the Central Music Academy Endowment at BGCF within 30 days. Make checks payable to Blue Grass Community Foundation and note "Central Music Academy Endowment" in the memo line.

Need assistance?

Blue Grass Community Foundation is available to help you navigate the application to ensure you don't miss out on this unique opportunity.

Blue Grass Community Foundation Contact Information:

• Address: 499 East High Street, Suite 112, Lexington, KY 40507

• Phone: 859.225.3343

• Email Support:

  • Scott Fitzpatrick, VP/Advancement: sfitzpatrick@bgcf.org

  • Halee Cunningham, General Counsel/Director of Planned Giving: halee@bgcf.org

Disclaimer: Central Music Academy is not a tax or financial advisor. This webpage is for informational purposes only. Please consult with a qualified professional before making any financial decisions.

A Guide to Leaving a Legacy Gift

Create Lasting Impact for Future Generations

A legacy gift is a powerful way to ensure that the mission of Central Music Academy endures long into the future. By including CMA in your estate plans, you provide the "evergreen" funding necessary to keep students learning from professional mentors in our classrooms for decades to come.

Why Leave a Legacy Gift?

• No Immediate Cost: Most legacy gifts do not affect your current finances or lifestyle. You maintain full control over your assets during your lifetime.

• Flexibility: You can choose to give a specific dollar amount, a percentage of your estate, or the remainder after taking care of your loved ones.

• Tax Efficiency: Legacy gifts can significantly reduce the estate tax burden on your heirs.

• A Lasting Statement: A gift in your will or trust is a testament to your values and your belief in the transformative power of music.

Popular Ways to Leave a Legacy

1. A Bequest in Your Will or Living Trust (The Most Common Way to Give): You can include a simple provision in your will or trust naming Central Music Academy as a beneficiary.

• Sample Language: "I give, devise, and bequeath to Central Music Academy, a nonprofit corporation located in Lexington, KY (EIN 61-1466695), the sum of $_______ [OR _____% of my estate] to be used for its general purposes."

2. Beneficiary Designations (The Simplest Way to Give): You can name Central Music Academy as a beneficiary of your Life Insurance Policy or Retirement Account (such as an IRA, 401(k), or 403(b)).

• Why it’s smart: Retirement assets are often the most heavily taxed if left to individuals, but they pass to nonprofits like CMA tax-free.

• How to do it: Simply request a "Change of Beneficiary" form from your plan administrator and list CMA as a primary or contingent beneficiary.

3. Successor Recognition for Donor-Advised Funds (DAF): If you have a Donor-Advised Fund, you can name Central Music Academy as the "Successor Beneficiary" to receive all or a portion of the remaining funds in the account after your lifetime.

Step-by-step instructions

1. Reflect on Your Impact: Decide how you want to be remembered. Do you want to support general operations, or perhaps establish a named scholarship?

2. Consult Your Professional Advisors: Meet with your attorney or financial planner to discuss which legacy giving vehicle is best for your overall estate plan.

3. Use Our Legal Details: Ensure your documents use our correct legal name and tax ID:

   Legal Name: Central Music Academy

   Tax ID (EIN): 61-1466695

   Address: 3295 Eagle View Lane, Lexington, KY 40509

4. Let Us Know: If you have already included CMA in your plans, please let us know! We would love to thank you during your lifetime and ensure we understand exactly how you wish your gift to be used. We ask that you fill out this form to inform us of your intentions and how you would like to be recognized.

Disclaimer: While we are passionate about our mission, we are not estate attorneys. Legacy giving involves legal documents and tax considerations that vary by individual. Please consult with a qualified estate professional to ensure your gift is executed according to your wishes.