LIFE INCOME GIFTS
If you own stock that is fluctuating with the stock market and is paying you little in dividends, a “life-income” gift may be an appropriate year-end gift. You could transfer the stock to us and establish a “charitable gift annuity” that would provide you with a greater annual return—often between five and nine percent. This income would be paid to you and/or a loved one for life, after which the assets would be distributed outright to us. Through such an arrangement, you may be able to increase your income and make a meaningful (and tax-deductible) contribution to us at the same time.
Example: Suppose Mrs. Barnes, age 75, purchased some stock many years ago for $10,000 and that the stock is now worth $100,000. But, she receives only $2,000 per year in dividends, or a 2% yield. By transferring the stock to a charitable remainder trust and specifying that she wanted a 6% return for life, she could: triple her annual income (from $2,000 to $6,000); avoid the capital gains taxes that would otherwise be incurred on a sale of the stock; and be entitled to a charitable contribution deduction of approximately $55,000.
(The amount of the deduction depends upon the age of the donor, the rate of return specified in the trust, the size of the gift, and other factors.)