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Deferred gift annuity
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(Complete gift description)

Of all the gifts that pay you back, the charitable gift annuity is the simplest, most affordable, and most popular. You make a gift to a charity and in return, the charity agrees to make fixed payments to you for life. The gift agreement is a simple contract between you and the charity. Your payments become one of its general obligations, fully backed by all its assets. At your death, we apply the balance of the gift annuity to the program you designated when you made your gift.

Gift annuities offer attractive tax benefits:

  1. First, you receive a charitable income tax deduction for creating a gift annuity, based on the fair market value of the assets you contributed minus the present value of the life-income interest you retained.
  2. Second, if you fund your gift annuity with appreciated securities, no upfront capital gains tax is payable. Only a portion of your capital gain will be recognized, and the tax will be spread out over your annuity payments. The result? You can contribute appreciated but low-yielding assets and put the entire amount of your gift to work earning lifetime payments for you.
  3. Third, a portion of your annuity payments will be taxed at a low 15% capital gains rate if you create your gift with appreciated securities. Another portion will be treated as the tax-free return of principal. Only the balance of your payment is taxed as ordinary income to you. This tax treatment, not available on other types of life-income gifts, increases the effective yield of your gift annuity.

    Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy. If you live longer, the entire annuity payment will be taxed to you as ordinary income.

Planning points

  • A charitable gift annuity usually can be created with a gift of $10,000 or more. Gift annuities bring the benefits of a life-income gift into reach for many donors.
  • A gift annuity can make payments to a maximum of two people.
  • Gift annuity rates are partly determined by the age of the beneficiary. Younger donors may find planning benefits in a deferred gift annuity.

The Guggenheim is not yet offering charitable gift annuities; however, please let us know if you would be interested in creating one.

For more information

Please contact Adrienne Hines at 212 423 3513 or ahines@guggenheim.org to discuss charitable gift annuities.