“Assisting Parents with Gift Annuities

Gwen, age 59, sends her 85-year-old mother $200 every month ($2,400 annually) from income Gwen earns on various investments and certificates of deposit. Her mother doesn’t owe tax on the checks she receives from Gwen, but her daughter will have to pay 25% in income taxes on the money she sends to mom.

Gwen heard 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 Gwen could transfer $27,000 for a charitable gift annuity that would make annual payments of $2,400 to her mother for life.

Gwen likes the idea of helping her mother and our programs. But she also likes the fact that she no longer will owe income taxes on the investment income used to assist her mother – and that she will receive an income tax charitable deduction in 2009 for setting up her gift annuity.

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