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Charitable
Gift Annuity Example
Mary, a 79-year-old
widow establishes a charitable gift annuity with $100,000
cash. She receives a charitable income tax deduction and
an annual income for life of 9% of the gift amount, or $9,000.
Part of the income generated from the gift annuity is exempt
from tax. Gift annuities generally provide a least some
tax-exempt income.
Amount of annuity
$100,000
Current income tax deduction
$ 45,000
Annuity income
$ 9,000
Portion of income that is tax-free
$ 5,481*
*based on quarterly payments, 7% federal midterm rate
The charitable gift annuity may be more appealing to people in
their late 70's and older who benefit most from a gift that
pays a guaranteed dollar amount.
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