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Charitable Gift Annuity—Deferred
(Gift example)

You have just turned 58, and your two children are in graduate school. You provide the bulk of your family's income and retirement savings.

You want to make a gift of $50,000 to the Law School, but you are finding it hard to locate the assets to make such a gift outright. You also are looking for ways to offset your high taxable income, and for additional sources of retirement income.

You decide that starting this year, and for each of the following four years, you will create a new deferred gift annuity of $10,000 in stock. The stock has a 50% cost basis. Payments from all five annuities will commence when you turn 68, ten years from now, and will continue for the balance of your life.

Because the deferral periods will get shorter each year, the five annuities will have different income rates and charitable deductions. Here are the estimated income and tax benefits of the five deferred gift annuities:

Annuity
Rate

Annuity
Amount

Charitable
Deduction

Year 1

6.7%

$670

$4,229.10

Year 2

6.5%

$650

$4,216.20

Year 3

6.3%

$630

$4,204.10

Year 4

6.1%

$610

$4,192.90

Year 5

5.9%

$590

$4,182.00

Total

$3,150

$21,024.30

In each case, a portion of your annuity payment will be tax-free, a portion will be capital gain and a portion will be ordinary income.

Click here to calculate the benefits a deferred gift annuity would give you.


*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates.

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Email us, or call us at 877-307-0158 (toll free) or 434-924-4514 (direct) so that we may answer your questions and help you through the process.


The materials provided in this website and the examples contained herein are for illustration purposes only and are not intended as legal or tax advice. We encourage you to consult your own legal and tax advisor.