Gifts of cash or stock to the NC A&T University Foundation made in the form of a "life income gift", can actually increase your income. A life income gift allows you to transfer assets over to the NC A&T University Foundation now, and yet continue to receive the income from the cash, stock, or other property contributed. It will allow you to:
• Increase your income for life
• Receive a generous charitable contribution deduction this year
• If you contribute stock, avoid any capital gains tax on the appreciation
A life income gift is often made through a unitrust (click here for more information on unitrusts) or an annuity trust. With a unitrust, you and your beneficiary receive annually a fixed percentage of the fair market value of the assets in trust. With an annuity trust, you and your beneficiary are paid an agreed upon fixed amount from the trust annually in addition to tax benefits.
Please check with your accountant, attorney, or financial consultant for additional information on how these general rules apply to your situation.
A charitable gift annuity is a contract between N C A&T University Foundation, Inc and you. You transfer cash or securities to the Foundation in exchange for quarterly payments in the form of a guaranteed fixed annuity to you, another designated beneficiary or both. Although there is no minimum age for establishing an annuity, the amount you receive is determined by a variety of factors including the age of the income beneficiary.
The maximum rate of return for the annuities is 9.4 percent, which represents the amount an 80-year-old beneficiary receives. Any donor older than 80 years also receives the 9.4 percent maximums rate. A minimum initial contribution of $5,000 is required, and you can enter into subsequent contracts with contributions of $2,000 or more. When the annuity matures, the principal is available to the Foundation and can be designated for the unrestricted use of the University or for a specific area.
Mrs. Franklin, age 70, transfers a $10,000 cash to fund a gift annuity. In the example below, she receives a 7.7 percent return.
| Gift amount: | $10,000 |
| Income per year | 770 |
| Tax-free portion | 369 |
| Taxable portion | 401 |
| Income Tax Charitable Deduction* | $4,139 |
If, instead of cash, Mrs. Franklin chooses to donate appreciated property worth $10,000 with a cost basis of $5,000, the specifics of her gift are as follows:
| Gift amount | 10,000 |
| Income per Year | 770 |
| Tax-free portion | 184 |
| Taxable portion | 401 |
| Capital Gain portion | 184 |
| Income Tax Charitable Deduction* | 4,139 |
| Life Income Portion | $5,861 |
*The discount rate used in calculating these figures is 7.6%, which is the rate for October 1997
• Satisfaction of providing for the University’s future
• Guaranteed annual income, a substantial portion of which is tax-free;
• Immediate income tax charitable deduction for a portion of the transfer that represents the gift to the University;
• Elimination or reduction of capital gains tax if funded with appreciated assets;
• Potential estate tax savings;
* Note: Regulation of gift annuities varies from state to state. For this reason, the gift annuities described here may not be available in all states
