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Charitable Gift Annuities

Complete gift description

Who says there no benefits of aging! The charitable gift annuity is a gift that pays you a fixed income based on your age. The older you are, the greater your income rate! In fact, of all the gifts that pay you back, the gift annuity may be the simplest and most affordable. Here are some of the features that make the gift annuity a popular life-income gift:

  • You make a gift to the MU Foundation and we agree to pay you a fixed amount for life. You know up front how much you will receive in return for your gift.
  • A charitable gift annuity is easy to create. The gift agreement is a simple contract between you and The Marshall University Foundation, Inc. Your payments become one of our general obligations, backed by our corporate assets.
  • After the death of the last annuitant, the balance of your gift annuity is available for the use you designated when you created your gift annuity.

What are the tax benefits of a charitable gift annuity?

  • First, you will receive a charitable income tax deduction when you create a gift annuity, based on the fair market value of the assets you contributed minus the present value of the life-income interest you retained.
  • Second, if you fund your charitable gift annuity with appreciated securities, no up-front capital gains tax is payable. You can contribute appreciated but low-yielding assets and put the entire amount of your gift to work earning income for you. Only a portion of your capital gain will be reportable, and the tax will be spread out over your annuity payments.
  • Third, is the treatment of your income payments: part of each payment will be treated as the tax-free return of principal. This increases the effective yield of a gift annuity and is not available on other types of life-income gifts.

    (Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy -- if you live longer, the entire annuity payment will be taxed to you as ordinary income.)

This sounds great. What size contribution do I need to make?

A charitable gift annuity may be funded with a gift of $10,000 or more. Gift annuities bring the benefits of a life-income gift into reach for many donors.

Are there any other restrictions?

First, by law your gift annuity can make payments to a maximum of two people. In addition, generally, gift annuities pay higher rates to those who are older. If you are under 65-years of age, you may choose to read more about the deferred gift annuity.