An immediate income tax charitable deduction is available for the gift portion of the arrangement. The amount depends on the age or ages of the beneficiaries, and the timing of the gift.
A portion of each payment is treated as a tax-free return of the original investment, and is not taxed. The rest of each payment is taxed at ordinary income rates.
With a gift of appreciated property, a portion of each payment will be taxed at the capital gain tax rate. The capital gain attributable to the donated appreciated property is spread out over many years.
Benefits to Deferred Charitable Gift Annuity
Deferring payments allows donors to receive higher annuity rates. Deferred payments are often used to help grandchildren with future college expenses or to supplement retirement.
Giving to Augustana
With an Augustana Gift Annuity, donors can enrich the experiences of current Augustana students in a variety of ways, including:
- Giving to academic departments or student organizations
- Providing scholarships
- Strengthening the endowment