A Charitable Gift Annuity can provide tax benefits now and a life-time income for the donor and a beneficiary if desired.
A deferred gift annuity is variation on a gift annuity. A gift is made and the charitable organization promises in return to pay you an income stream that begins on a future date you specify. The annuity rate is calculated based on your age when the payments begin and will be greater than an immediate annuity based on your current age. The charitable deduction, which you get to take in the year of the gift (subject to your tax circumstances), will also be based on when the payments begin and will also be greater than if it was an immediate annuity.
A flexible deferred gift annuity allows you to pick a range of dates when the annuity payments will begin. The payment amount will be based on the year you choose in the future to have payments begin. The charitable gift deduction is based on the earliest possible beginning date and is taken in the year of the gift, subject to your tax circumstances.
An attractive benefit of deferred gift annuities is that they enable a donor to make a gift now and take a charitable income tax deduction now while in a high tax bracket. Income may be deferred, for instance, until after retirement, when the rate of tax will presumably be lower. Deferred gift annuities are creative ways to delay income to pay for children’s or grandchildren’s college expenses, supplement your retirement income, or assist with assisted-care living arrangements that may be inevitable.
A part of each payment, as in any gift annuity, may be tax-free for a period of years. However, the precise amount of each payment will depend on the tax rules in effect when the payments start.
Charitable gift annuities are the gifts that keep on giving. Contact us at 765-662-0988 or GCRM@sbcglobal.net for more information.