If you would like to receive a tax deduction, increase your income, or are looking for a way to give. Then we invite you to consider a charitable gift annuity, a gift that pays you income for life.
What is a charitable gift annuity?
A charitable gift annuity is an agreement between you and Christian Aid Ministries Foundation.* In exchange for you transferring cash or property to them, the organization will pay you income for your life.
Because a portion of the annuity is a gift to ministry. Congress has passed laws allowing special tax benefits to all participants in gift annuities.
Advantages of a charitable gift annuity
- You have the opportunity to make a significant charitable contribution.
- You receive income tax benefits both now and in the future.
- Because a part of the transfer is considered a gift, a current income tax deduction is allowed by the federal government for that portion.
- A part of each payment you receive will be tax-free.
- When appreciated property is transferred for a gift annuity, a portion of the capital gains tax will be avoided.
- The income you receive will never be reduced for as long as you live, and for a joint contract, your survivor also receives income for life.
- You have no management or investment worries or service fees to pay.
- The transfer will not be subject to estate taxes or probate costs.
- There are no health or age limitations.
- Most of all, your gift supports ideals and programs of eternal worth that will long outlast your own life. You receive the benefit of knowing that as you are taking care of your own needs, you are also helping provide for the continued work of God’s kingdom.
Two types of gift annuity agreements
A current gift annuity is designed for individuals who are ready for retirement or are already in their retirement years. It provides lifetime income, beginning immediately upon the purchase of the gift annuity agreement. A single annuity will pay income to you for as long as you live.
A joint and survivor annuity will pay income jointly to two beneficiaries. At the death of the first beneficiary will continue to pay income to the surviving beneficiary for life.
A deferred gift annuity provides all the advantages of a current gift annuity. However it is designed for individuals who are planning for future retirement. Money is accumulated in the annuity contract until retirement (a designated age) at which time payments begin. The deferred annuity is also available as a single, joint and survivor, or survivorship agreement.
Taxation of a charitable gift annuity
You will receive a charitable contribution deduction on your federal income tax. This can be deducted by up to 60 percent of adjusted gross income in the year the annuity is established. Providing your annuity is funded with cash or property which has not appreciated in value. If the amount of the deduction exceeds this percentage, any “excess” can be carried forward for up to five years.
If your annuity is funded with property which has appreciated in value. Your contribution is deductible by up to 30 percent of adjusted gross income. It is possible to increase the 30 percent limitation to 60 percent (with a five-year carryover for any “excess”). To qualify for the increased percentage, you can choose to make a special election that limits the deduction value to the basis of the property.
You should consult your own advisers for the methods which would be most advantageous to you.
How to establish a charitable gift annuity.
We would be happy to help you determine how the annuity might fit in your overall plan of stewardship. If you will provide the information for a charitable gift annuity proposal on the enclosed response coupon, we will be happy to prepare a personalized presentation, which outlines the specific benefits and details of the charitable gift annuity for you. If you have questions, feel free to contact us.
© Lifestyle Giving, Inc. 2016 | Used by permission
*Annuities will be issued by either CAM Foundation or CAM depending on the state in which you live.
