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An individual may make a
"gift" or "donation" to a nonprofit or educational origination and in
return receive an income for life and multiple tax deductions.
The Gift and Tax Deduction
An individual or couple may
fund a charitable gift annuity with cash, marketable securities.
Cash
Cash donations to fund a charitable gift annuity entitles you
claim a charitable income tax deduction in an amount of up to 50% of your
adjusted gross income. If in the year you make the gift and the gift is
greater than 50% of you income you may carry the balance forward for up to
five years.
Securities
Securities used to fund a charitable gift annuity provide the donor
with a unique advantage. If the securities have been held for more than
one year the charitable income tax dedition is based on the market values
of the securities. You may claim a charitable income tax deduction of up
to 30% of your adjusted gross income. If in the year you make the gift
and the gift is greater than 30% of your income you may carry the balance
forward for up to five years.
The Income
Once the gift has been made you can elect to deferrer the income or chose to
have it begin immediately.
Guaranteed Income
One advantage of a charitable gift annuity is that it creates a guaranteed
income at a guaranteed rate of return. Most organizations use the table set by
the American Council on Gift Annuities (ACGA) to determine the maximum rate
which can be paid to you.
Non Taxable Income
Based on your life expectancy a part of each payment for a limited time
period is not taxable, this is known as the exclusion allowance.
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