Education: Cheap Giving

If any U. S. citizen might be expected to know income tax law to the last loophole, he would be one “having a taxable net estate of $1,000,000 and a taxable net income of $100,000.” To just such a man, however, the Cornellian Council Bulletin last week pointed out how much he could “save” by giving Cornell $15,000, the maximum percentage of his income on which Federal law allows gift exemptions. He would, the Bulletin reminded him, save $8,650 in Federal income tax, an average state income tax of $1,000. Deducting $15,000 from his estate, moreover, would save his heirs $4,350 in estate taxes, approximately $375 in administration costs.* By such figuring the Bulletin reduces the “cost” of a $15,000 gift to $625.

Tactfully concludes the Bulletin: “We emphasize that this summary and the chart are intended primarily to illustrate the solicitude with which the Federal revenue statutes treat contributions to educational institutions.”

*He would, of course, also decrease his estate by merely paying his income tax.