Planned giving or charitable gift annuities are common today with many non-profit organizations benefiting greatly from the tax exemption that comes through this avenue from both the state and federal governments. There are many advantages that are closely associated with the charitable gift annuities and many and any organization that is duly registered can benefit from this kind of an arrangement.
Advantages of charitable gift annuities
1. One of the greatest benefits of the planned giving includes tax deduction from a certain percentage of the gift given. The donor is also guaranteed of a certain amount of tax-free retirement income which can be enjoyed by the donor or his or her spouse. This income can either be deferred until they are needed or be given immediately.
2. The recipients of the gift are also guaranteed of a certain amount of funds which will become available to them upon the demise of the donor.
3. Of the many benefits of the gift annuities, the peace of knowing that there are lives helped and changed by the gifts given is one of the greatest benefits for many.
4. In case the gift annuity is funded using appreciated securities, there is no straight tax on capital gains. The tax is outspread over your allowance payments and only a small section of the investment gains is reportable.
It is important to bear in mind that the rate of your annuity is determined by your age. The older the donor, the higher the payments issued. The gift annuity can benefit both the donor as well as some other two people they might decide to name, giving them a fixed income throughout their lives. It is important to consult a financial adviser before buying the charitable gift annuities and understand how your financial situation could affect the payment of your payments as far as tax is concerned.