How does 5.1% interest sound? That’s what a 70-year old donor earns on a Charitable Gift Annuity of $10,000. The tax deduction in the year of the irrevocable donation is $4002. The annual payments are $510, and, what’s even better, $377 of the annual payment is tax free for the first 15 years.

A charitable Gift Annuity is an irrevocable gift to the Indiana Masonic Home Foundation that provides potential tax benefits and lifetime income. A gift annuity has the following features and benefits:

  • The annuity rate is determined at the time the gift is made and will not be affected by future rate changes.
  • As a portion of the annuity is a gift, the donor receives an income tax deduction for the portion that is the gift.
  • A portion of the annual annuity income is exempt from Federal Taxes as it is considered a return of principal.
  • A two-life annuity will make payments to the donor and spouse or other annuitant for life without a reduction in payment upon the first death. The joint ages at the time the donor makes the gift determines the annuity rate.
  • The donor may name another beneficiary. The donor receives the income tax deduction. The beneficiary receives the income, including any tax-free benefits.

Charitable Gift Annuity Interest Rates for Single Life

As of November 2, 2015[1]

 

Age Rate
60 4.4%
65 4.7%
70 5.1%
75 5.8%
80 6.8%
85 7.8%
90 9.0%

Another Gift Annuity Illustration[2]:

  • On January 1, 2016, donor and wife, each of whom is 80 years of age, make a $10,000 annuity gift.
  • Donors receive $4329 tax deduction in the year of the gift.
  • Donors receive $570 income for life.
  • $446 of the annual income is tax-free for 12 years.

For information about Indiana Masonic Home Foundation giving programs, visit our website at www.imhf.org, contact us by telephone at (317) 637-9582 or toll free at (800) 277-4643, or send an email to info@imhf.org.

[1] Charitable Gift Annuity interest rates change periodically.

[2] These calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. The actual benefits may vary depending on several factors, including the timing of the gift.