Charitable Gift Annuity

What is a Charitable Gift Annuity?

A charitable gift annuity is a simple contract between you and West Wisconsin Land Trust.

Pine Creek/Maiden Rock, Pierce County

In exchange for your irrevocable gift of cash, securities, or other assets, West Wisconsin Land Trust agrees to pay one or two annuitants you name a fixed sum each year for life. The older your designated annuitants are at the time of the gift, the greater the fixed income West Wisconsin Land Trust can agree to pay. In most cases, part of each payment is tax-free, increasing each payment's after-tax value. Payments may be made annually, semiannually, or quarterly.

Example:

If you irrevocably transfer $1,000,000 in property, with a cost basis of $250,000, to West Wisconsin Land Trust in exchange for a $78,000 annuity for annuitants, age 81 and 77, benefits would include:

1. You will qualify for a federal income tax deduction of approximately $389,090. Your deduction may vary modestly depending on the timing of your gift. Note that deductions for this and other gifts of long-term appreciated property will be limited to 30% of your adjusted gross income. You may, if necessary, take unused deductions of this kind over the next five years, subject to the same 30% limitation.

2. Your designated annuitants will receive fixed payments in quarterly installments totaling $78,000 each year for life. In addition, $11,232 of each years payments will be tax-free for the first 13.6 years.

3. You will owe no capital gains tax at the time of your gift. Rather, $33,696 of your designated annuitants annual payments from the gift annuity will be taxed as capital gain in each of the first 13.6 years of payments. If you were to sell and reinvest this property yourself, you would owe tax on $750,000 of capital gain.

4. Your estate may enjoy reduced probate costs and estate taxes.

5. You will provide generous support of West Wisconsin Land Trust.

These calculations are estimates of gift benefits; your actual benefits may vary depending on the timing of your gift.

If you would like to produce your own charitable deduction calculations, visit PG Calc.

For more information on donations, please contact the West Wisconsin Land Trust.