Gifts That Pay Income: Charitable Gift Annuities &
Charitable Remainder Trusts
Charitable Gift Annuities
There’s a way for you to support the University of North Georgia and feel confident that you have dependable income in your retirement years. You can do this with a charitable gift annuity.
This type of donation can provide you with regular payments and allow us to further our work. You can also qualify for a variety of tax benefits depending on how you fund your gift. If you fund your gift annuity with cash or appreciated property, you qualify for a federal income tax deduction if you itemize. In addition, you can minimize capital gains taxes when you fund your gift with appreciated property.
And now, you can fund your gift using your IRA assets. If you are 70 ½ and older, you can make a one-time election of up to $55,000 to fund a gift annuity. While your gift does not qualify for an income tax deduction, it does escape income tax liability on the transfer and count toward all or part of your required minimum distributions.
An Example of How it Works
Dennis, 66, and Mary, 65, want to make a contribution to UNG but they also want to ensure that they have dependable income during their retirement years. They establish a $20,000 charitable gift annuity.
Based on their ages, they will receive a payment rate of 5.1%, which means that they will receive $1,020 each year for the remainder of their lives. they’re also eligible for a federal income tax charitable deduction of $6,402* when they itemize. Finally, they know that after their lifetimes, the remaining amount will be used to support our mission.
*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Fund Your Donation With:
Cash
Appreciated Securities
Closely Held Stock
IRA Assets
Charitable Remainder Trusts
If you have built a sizable estate and also are looking for ways to receive reliable payments, consider a charitable remainder trust. At the end of the trust term, the balance in the trust goes to the University of North Georgia.
These types of gifts may offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
An Example of How it Works
Wanda, 75, wants to make a gift to UNG but would also like more income in the future. Wanda creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Wanda receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $290,360* in the year she creates and funds the trust. This deduction saves Wanda $92,915 in her 32% tax bracket.
*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Fund Your Donation With:
Cash
Appreciated Securities
Retirement Plan Assets
Real Estate
Closely Held Stock
Tangible Personal Property
For questions, please contact Directors of Estate & Gift Planning Jeff Boggan, jeff.boggan@ung.edu or Wendi Huguley, wendi.huguley@ung.edu.