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Flexible Deferred Gift Annuity

Flexible Deferred Gift Annuity
Eddie is a 54-year-old executive at a large healthcare company. He purchased company stock during years when the stock price was low, and now the stock has grown substantially.

Eddie and his wife, Ann, sold a vacation home earlier this year and are looking for a way to offset the capital gains tax owed on the sale. Eddie enjoys the challenge and responsibility of his job and is not quite ready to retire. But, he is looking at planning options that will provide income in the future with the flexibility to retire when he is ready.

Ann: We needed a charitable deduction to avoid paying the taxes we owed from the sale of our second home. While Eddie invested his energies at work, I spent years volunteering with our Jewish Federation and wanted to find a way to make a special gift to help further its work.

Eddie: Ann and I were both in good health, and I still enjoyed working. We were living comfortably on my current salary, but were looking for ways to plan for retirement in the future. I wasn't quite certain when I would retire, so we wanted to find an income source that would permit me to be flexible with my retirement date.

Ann: A gift planner from the Federation told us that a flexible deferred gift annuity would help us meet our goals. Instead of selling our appreciated stock and paying high capital gains tax, we could give it to them and receive an immediate charitable tax deduction to offset our current tax bill. The flexible deferred gift annuity would permit us to elect to begin taking payments for life when Eddie was ready to retire.

Eddie: We decided to set up the flexible deferred gift annuity and were able to achieve all of our goals. We received a charitable tax deduction in the year that the gift was made, and experienced immediate tax savings that helped to offset the taxable gain on the sale of our vacation home. When I am ready to retire, we will contact the Federation to begin payments, giving me the flexibility to continue working as long as I would like. In addition, the flexible deferred gift annuity makes it possible for us to receive a large portion of our income tax free, and this is an attractive benefit!

Ann: I suggested to Eddie that we ask the Federation to use the residual amount of our gift annuity to establish a Perpetual Annual Campaign Endowment (PACE) fund in our names. He happily agreed. Now, when Eddie and I are gone, our PACE fund can continue to support the good works that I supported during my lifetime as a Federation volunteer.

*Please note: The names and image above are representative of typical donors and may or may not be actual donors to The Jewish Federations of North America, a Jewish Federation or a Jewish Community Foundation. Since your gift annuity benefits under federal rules may be different from this couple, you may want to click here to view a color example of your benefits.

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Any tax consequences described on this page are based on U.S. federal tax law. Charitable deductions from state and local taxes or from Canadian and provincial taxes may not be available to the same extent as from U.S. federal taxes. The Jewish Federations of North America (JFNA) does not provide legal advice. Donors are encouraged to seek independent tax and legal counsel. You may read JFNA's charitable solicitation disclosure statement here and important information about endowment gifts and bequests to JFNA here.