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Charitable Remainder Annuity Trust
The charitable remainder annuity trust allows you to combine flexible management of your gift with a predictable fixed income payout. The annuity trust is individually managed and can pay fixed income either for life or a term of years to multiple beneficiaries.
Benefits
- You receive an immediate income tax deduction for a portion of your contribution to the trust.
- As long as you are one of the beneficiaries, you pay no immediate capital gains tax on any appreciated assets you donate. A portion of the capital gains tax is spread over your life expectancy.
- You or your designated income beneficiaries receive stable, predictable payments for life or a term of years.
- You can have the satisfaction of making a significant gift that benefits you now and Mission Catalyst later.
How It Works
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You transfer cash, securities, or other appreciated property into a trust.
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The trust makes fixed annual payments to you or to anyone you name.
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When the trust ends, the principal passes to Mission Catalyst.
Example
Mr. Jones, age 62, transfers $100,000 in appreciated securities, for which he paid $60,000, to establish a charitable remainder annuity trust and elects to receive $6,000 annual payments (six percent) for his life and for the life of his 60-year-old wife. By doing so he eliminates the capital gains tax on the $40,000 of appreciation and also realizes a charitable income tax deduction of approximately $45,621. The beneficiaries will receive $6,000 per year, regardless of fluctuations in the value of the trust assets or actual income realized by the trust.
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