Life-income gifts allow you, the donor, to make a gift to The Cedars for your lifetime, or the lifetime of you and your spouse. In return, you receive income back.
There are many sorts of life-income gifts, but all of them share certain characteristics:
- The gift is irrevocable. Once you make the gift, you cannot get the assets back for your personal use.
- That said, you will receive income for your lifetime – or, if you prefer, the lifetime of you and your spouse or partner.
- The income you receive will generally be greater than what the asset is now providing. In a time of low interest rates and modest dividend distributions, income from these sorts of gifts can be a significant boost over what you are currently receiving from those assets.
- There are significant advantages to you if you make your gift with appreciated stock. That’s because in donating appreciated securities to The Cedars, you avoid having to pay capital gains tax. The full value of the stock can then go to work for you, and, eventually, for The Cedars.
- You will be able to claim a charitable deduction for a portion of your gift. The exact amount of your deduction will be calculated at the time of your gift. (The charitable deduction is usually somewhere between 40% and 60% of the value of the gift amount. The exact amount is calculated based upon your age, the income you will receive, and the type of asset you use to make the gift.) If you are unable to claim the full amount allowed on your taxes in the year of the gift, you can “carry over” the balance of the deduction for the following five years.
- Though your income from these life-income gifts is, generally speaking, taxable, the tax treatment is often favorable. This too depends on your specific situation, and also the type of asset you are donating. Ask us, and we can help you!
- You may find that you can give a gift to The Cedars larger than you ever could have imagined – all while getting income in return!
There are two major forms of life-income gifts: Charitable Gift Annuities and Charitable Remainder Trusts. Click on the link below to learn more about each!
Charitable Gift Annuities and Remainder Trusts
For more information on life-income gifts at The Cedars, contact Tracy Ericson, Associate Director of Development, at (207) 221-7007 or firstname.lastname@example.org.