ABOUT CHARITABLE GIFT ANNUITIES
A charitable gift annuity is an agreement between you and Cincinnati Christian University in which the School agrees to pay you or you and a spouse a guaranteed fixed income for life in exchange for a cash gift or marketable securities.
A gift annuity entitles you to an immediate income tax charitable deduction in the year the gift is made, as well as exceptional rates ranging from 6% to 12% depending on age, number of beneficiaries, and whether income is deferred.
You will also be gratified to know that your gift will continue to help Cincinnati Christian University continue to impact a lost world until Jesus returns.
How do the tax benefits work?
A gift annuity is considered a charitable gift. When you file a Tax Return, you are permitted to take a charitable deduction. In reality, the charitable deduction reduces the cost of making the gift by offsetting income tax that would otherwise be paid. Additionally, a portion of the annuity income is treated as a tax free return of principal.
Because a gift annuity funded with appreciated stocks or mutual funds is partially a gift and partially an annuity, a portion of the gift will not trigger capital gains. When funding a gift with appreciated securities a gain is realized only on the portion allocated to funding the annuity. The amount of capital gain realized via a gift annuity funded with appreciated stock will always be significantly less than if the stock was liquidated and then proceeds were used to fund the annuity.
A gift annuity may be established to benefit one or two individuals. Payments can be made for life to one individual or to an individual for life and then to a survivor for life.
- One-life annuities cover one life and terminate when the annuitant dies.
- Two-life annuities pay income to two people for life with the second person receiving the same amount after the first one dies.
- A deferred annuity allows a delay in receiving income.
- A deferred annuity offers a higher payout rate.
Betty Brown is a 74 year old retired schoolteacher who desires to make a gift to Cincinnati Christian University now instead of later. She is concerned however about an income stream to pay monthly living expenses and the fact that the CDs that her savings is invested in are paying hardly any interest.
She decides to begin by making a $10,000 gift annuity agreement. She will likely add more later once she sees the results compared to her CDs. She will see the following results:
Guaranteed Annual Income of $800.
Betty will receive this for life and $436.80 will be tax free until age 87.
Very Competitive Rate.
Rate is 8% with an effective rate of 11% when tax reduction is included.
Immediate Income Tax Deduction.
Berry receives an income tax deduction of $4,283. This could save $1,199 in taxes.
Satisfaction of making a $10,000 gift to CCU.
Learn more about a Charitable Gift Annuity:
We will work with you to establish an annuity that meets your needs. Please call Dick Devine at 513-244-8131 to discuss this excellent stewardship tool. To receive a confidential, mailed to your home proposal and income profile, request your FREE "Personalized Annuity Proposal" today!
Or, mail information to Cincinnati Christian University, Planned Giving Office, 2700 Glenway Avenue, Cincinnati, OH 45204
