Miami-Dade Florida Charitable Gift Annuity
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The Bottom Line If you want to make a significant contribution to a charity you care about ? but also want the security of a fixed, reliable income for life ? a charitable gift annuity could be a great choice.
Charitable annuities may not work for many people because they are charity specific. While this works well for some, many people like to support several different charities. They're often better tools for older people looking to help leave and establish their legacy.
The Bottom Line. Thanks to changes in interest rates and the tax picture, charitable gift annuities make a lot of sense these days for investors. The ability to get income for life as well as some hefty deductions have breathed new life into the investment.
Annuity Gifts The Tax Code provides a lifetime exemption (currently $12.06 million per person in 2022). As long as your total lifetime gifts and estate are below this amount, you don't have to pay taxes when you gift an annuity. However, the annual exclusion amount for gifts, according to the IRS, is $16,000 for 2022.
A charitable gift annuity (CGA) is a contract under which a 501(c)(3) qualified public charity, in return for an irrevocable transfer of cash or other property, agrees to pay the annuitant(s) a lifetime income. The maximum number of annuitants is two, and payments can be made to them jointly or successively.
The amount of your payments is based on your age and the current interest rate. For example, if you are 60 years old and donate $1000 to a charity with a current interest rate of four percent, you would receive $40 per year for the rest of your life.
Benefits of Establishing a Charitable Gift Annuity You receive fixed, steady income for life. Part of the income is tax-free. You may qualify for a federal income tax charitable deduction when you itemize. If funded with appreciated securities, no upfront capital gains tax is due.
According to Kiplinger, your tax deduction is usually 25 to 55 percent of the amount you transferred to charity. Your tax deduction is calculated by taking the full amount of your contribution and subtracting the present value of the lifetime payments you're scheduled to receive.
A charitable gift annuity is a way you can make a gift to your favorite charity and receive fixed payments for life in return. The payments can begin immediately or can be deferred to a future date that you choose.
