The American Red Cross, a humanitarian organization led by volunteers and guided by its Congressional Charter and the Fundamental Principles of the International Red Cross Movement, will provide relief to victims of disaster and help prevent, prepare for and respond to emergencies.
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Assisting Parents with Gift Annuities
Sylvia, age 59, sends her 85-year-old mother $200 a month ($2,400 annually) from income Sylvia earns on various investments and certificates of deposit. Her mother doesn’t owe tax on the checks she receives from Sylvia, but her daughter will have to pay 25% in income taxes on the money she sends to mom.
Sylvia heard from one of our planned giving officers about how charitable gift annuities can be used to assist family members and called our office to ask if this technique might work for her. We suggested that Sylvia could transfer $44,000 to the American Red Cross for a charitable gift annuity that would make annual payments of $2,420 to her mother for life. The $2,420 payments would then continue to Sylvia for her lifetime, after her mother passes away.
Sylvia likes the idea of helping her mother and the humanitarian work of the Red Cross. But she also likes the fact that she no longer will owe income taxes on the funds provided to her mother – and that she will receive a 2008 income tax charitable deduction of about $11,500 for setting up her gift annuity, as well as an excellent future stream of income.
If you, like Sylvia, are currently providing financial support for a parent, we’d be pleased to provide a customized illustration of how a gift annuity might work for you.
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© Copyright 2005 The
American National Red Cross. All Rights Reserved.
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The articles in the issues of the Legacy newsletters are for general illustration purposes only. Information, Gift annuity and tax rates were current as of the time of publication. There can be no guarantee that such information will continue to be accurate in the future. Interested Donors should check with the Gift Planning Office for current rates and deduction amounts before completing their gifts. Calculations of tax deductions will vary based on applicable federal discount rates, which change on a monthly basis. The American National Red Cross is not engaged in rendering legal or tax advisory service. For advice or assistance in specific cases, the services of an attorney or other professional advisor should be obtained. Certain links in this site connect to other Web sites maintained by third parties over whom the American National Red Cross has no control. American National Red Cross makes no representations as to the accuracy or any other aspect of information contained in other Web sites.