Receive Reliable and Partly Tax-free Payments
A Charitable Gift Annuity (CGA) is a contract between the donor and the charity whereby the donor is exchanging a gift for an assured fixed payment for life. Payment may be made for one or two lives. The size of the payment is based on the age(s) of the payment recipients; the older the recipient(s) the larger the payment may be.
Donors are allowed a tax deduction for a portion of the amount gifted to the CGA. For the recipient’s life expectancy, a portion of each payment will be tax-free. When funded with appreciated assets, part of the capital gains tax is forgiven, and the rest is spread over the donor’s life expectancy. Capital gains are treated differently when a CGA is created for someone other than the donor and/or a spouse.
Illustration of a Charitable Gift Annuity Funded With Cash
The following examples are for charitable gift annuities making annual payments and funded in 2012 with $10,000 cash.
Available payout rates are revised by the American Council of Gift Annuities from time to time.
|Age of Income Recipient||Age of Income Recipient||Approximate Payment Amount Tax Free||Approximate Income Tax Deduction|
|65||4.7% / $470||$367||$2,848|
|75||5.8% / $580||$482||$4,216|
|85||7.8% / $780||$706||$5,485|
|65 & 65||4.2% / $420||$328||$1,960|
|75 & 75||5.0% / $500||$412||$3,418|
|85 & 85||6.7% / $670||$590||$4,636|