Gift Annuity Working
In this case, the donor is a man. He is now over 80. He planned to leave The N.C. Zoo Society, Inc., $10,000 in his will, but things have not gone quite as well as he planned.
He talked to the Zoo Society's Russ Williams in 2004. If he made a gift of $10,000 then, through the Community Foundation of Greater Greensboro, restricted to the North Carolina Zoological Society, Inc., he could let that $10,000 work for him then.
His plan was to fund this annuity with cash. The Community Foundation calculated that it could offer an eight percent annuity. In his tax bracket, that would result in an effective payout rate of 12.7 percent because of the tax savings associated with the gift.
The donor began receiving payments of $800 from his gift. (The tax-free amount was $547.20.) His income tax deduction for the one-time gift of $10,000 was $4,855, saving him $1,602. At the end of his life, $7,049 may remain for the N.C. Zoo Society.
This is a real, and recent, example.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.