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• The Charitable Gift Annuity Th e C ha ri ta b l e Contact Us Frequently Asked Questions Phone: Gift Annuity ■ What is the minimum amount needed 626-395-2927 to fund a gift annuity at Caltech? A Lifetime of Income $25,000. E-mail: firstname.lastname@example.org and a Personal Legacy ■ Is my age a factor? Yes. Prospective annuitants must be a Mail: minimum of 60 years old when payments Office of Gift Planning begin. Donors who wish to name annui- Mail Code 5-32 tants under age 60 may establish a 1200 E. California Boulevard deferred gift annuity. Pasadena, CA 91125 ■ How is my payment determined? On the Web: • The number of annuitants http://giving.caltech.edu/gp/ • The age(s) of the income beneficiaries • The value of the funding asset ■ Will I receive a charitable deduction? Yes. Any unused portion can be carried forward for up to five additional years. ■ How will my annuity payments be taxed? Annuity payment taxation is based on the funding asset: • Gift of cash—the payment is partly tax-free and partly ordinary income. • Gifts of appreciated securities—the payment is partly tax-free, partly capital gain and partly ordinary income. Of f i c e o f G i f t P l an n i ng This brochure is intended for educational purposes only and is The Office of Gift Planning can provide exact not offered and should not be taken as legal, tax or other calculations to determine your particular professional advice. Always consult an attorney, accountant or other professional advisor before making any material deci- circumstances. sions based on any data presented herein. To ensure compli- ance with certain IRS requirements, we disclose to you that information contained in this brochure is not intended or written to be used, and may not be used, for the purpose of C al ifo r ni a I ns t it u te o f Te c hn o lo g y avoiding tax-related penalties. The Charitable Gift Annuity The Caltech Gift Annuity Program The Basics Special Annuity Techniques A lumni and friends of Caltech have the oppor- tunity to use charitable gift annuities to achieve financial and charitable goals. ■ Caltech follows the recommended payment rates established by the American Council on Gift Annuities. Payments can begin when the gift is Other advanced gift planning techniques can help create the best plan for you: ■ Laddered Annuities—can provide protec- made or be deferred. tion from inflation How it works ■ A benefit of giving through an annuity is eligi- ■ Deferred Annuities—provide an immediate A charitable gift annuity is bility for an immediate tax deduction for the a contract in which Caltech tax deduction while deferring payments year the gift is made, even if you elect to start until you need the income promises to pay a fixed payments in a later year. income each year for the ■ Flexible Deferred Annuities—provide the ■ Benefactors may fund a gift annuity through a rest of the annuitant’s life benefits of deferred annuities without the in exchange for a gift of cash or securities. The life- gift of cash or appreciated securities. need to choose a definite payment start date time annuity is backed by a statutory reserve and ■ Donors can avoid capital gains tax by funding a (can correlate with considerations like the full assets of Caltech. gift annuity with appreciated stock. retirement) Example This chart illustrates payments for one Jane Throop, 70, makes annuitant based on a $100,000 gift of Benefits a $100,000 gift of stock stock with a cost basis of $20,000 to Caltech using a gift Annuity Total Tax-Free Tax ■ Income for life Age annuity. Based on her age, Rate Payment Portion Deduction ■ Guaranteed payments backed by the Institute agrees to pay 60 4.4% $4,400 $660 $20,457 the assets of the Institute Jane a 5.1% annuity rate 65 4.7% $4,700 $723 $28,111 ■ Tax deduction for the remainder of her 70 5.1% $5,100 $807 $35,821 lifetime. She will enjoy an 75 5.8% $5,800 $937 $41,860 ■ Partially tax-free payout annual payout of $5,100 and an immediate income-tax deduction of 80 6.8% $6,800 $1,121 $47,311 ■ Capital gains tax savings on gifts of $35,821. Jane can carry forward any 85 7.8% $7,800 $1,335 $54,610 appreciated stock unused deduction for up to five additional 90 9.0% $9,000 $1,566 $61,632 ■ Personal satisfaction from creating years. Jane purchased her stock in 1950 Sample calculations use the IRS discount rate of 1.4%, January a legacy at Caltech for $20,000. The capital gains tax due on 2012. Caltech follows the suggested rate schedules approved by the American Council on Gift Annuities. These rates are the $80,000 will be deferred and prorated effective January 1, 2012, and subject to change. Please contact over her lifetime. the Office of Gift Planning for current rates.
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