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The following is an illustration of how this type of donation works.
As Jerry and his wife, Ann, both 65, updated their estate plans, they spoke with their attorney about adding a charitable gift to their plans. Newly retired, the couple was looking for ways to secure future income.
The Gift
Jerry and Ann established a $20,000 gift annuity by donating stock they purchased years ago for $5,000.
Financial Benefits
Charitable gift annuity: $20,000
Annual payout for both lifetimes: $1,020
Tax-free portion: $159
Capital gain income: $477
Ordinary income: $384
Immediate charitable income tax deduction: $4,4131
The couple will pay some capital gains tax spread out over their life expectancies. A benefit, however, is that they will avoid an immediate payment of $2,250 in capital gains tax that would be owed if they sold the stock instead.
If you fund a charitable gift annuity by Dec. 31, you'll qualify for a tax deduction on this year's income tax return, if you itemize on your taxes.
Learn How You Can Help
To discuss the good your gift annuity could accomplish at Medic One Foundation, please contact Jan Sprake at (206) 744-9425 or jsprake@mediconefoundation.org.
1Based on annual payments and a 3.4 percent charitable midterm federal rate.
Your Next Steps
Getting Started | If You Don't Need Extra Income Right Now... | Is This Gift Right for You? | Case Study | How to Complete Your Gift | Action Items
Getting Started | If You Don't Need Extra Income Right Now... | Is This Gift Right for You? | Case Study | How to Complete Your Gift | Action Items
Charitable gift annuities may not be available in all states.
Copyright © The Stelter Company, All rights reserved.
The information in this website is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to income tax apply to federal taxes only. Federal estate tax, state income/estate taxes or state law may impact your results.
