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The Charitable Gift Annuity
                                                                                                                         Th e C ha ri ta b l e
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Frequently Asked Questions
                                                                                                                          Gift Annuity
■   What is the minimum amount needed
    to fund a gift annuity at Caltech?                                                                                           A Lifetime of Income
    $25,000.                                                              E-mail:
                                                                                               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                        
    • 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
    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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