A Charitable Gift Annuity (CGA) allows you to receive income for one or two lives, with the remainder becoming an endowed fund at the Community Foundation for the nonprofit organization or organizations that you specify.
Not only do you receive a charitable tax deduction for the contribution that funds the annuity, but part of the income that you receive annually from the annuity could be tax free.
Additionally you will know that you have endowed your favorite charity forever.
Here is an illustration of how it works:
John and Jane Doe want to have income for the rest of their lives and also leave a legacy for their favorite charity. They decide to fund a Charitable Gift Annuity in the amount of $50,000 with appreciated stock that cost them $15,000. They are age 83 and 80 respectively which means that they will receive an annual annuity payout of $3,000 per year for the rest of their lives. They receive an immediate tax deduction of $22,410 and out of the $3,000 they will be receiving each year $700.28 will be tax free. Their effective annuity rate is 8.16%!*
The balance remaining in the annuity becomes an endowed fund at the Community Foundation for the charity or charities they have selected. These nonprofits will receive annual income forever thanks to the generosity of John and Jane.
CGAs are written at the Community Foundation for those who are 70 or older. The minimum amount is $50,000.
If you are interested in having a detailed Charitable Gift Annuity illustration created for you, please contact Lisa L. Huertas, MBA at email@example.com or (561 )340-4512.
*This educational illustration is not professional tax or legal advice; consult a tax advisor about your specific situation. Figures cited in examples are for hypothetical purposes only and are subject to change.