Charitable Remainder Annuity Trust
What Is a Charitable Remainder Annuity Trust?
A Charitable Remainder Annuity Trust is a separately invested and managed charitable trust that pays you, your spouse, and/or other beneficiaries a fixed annuity income for life or a term of years. You receive a charitable income tax deduction for a portion of your gift to the trust. No additional gifts are permitted. After the annuity trust terminates, the accumulated principal or "remainder interest" goes to Columbia. Minimum gifts range from $200,000 to 250,000 if Columbia is to serve as the trustee.
Benefits
- You receive stable, predictable income.
- Depending on how your trust is invested, much of your income could be taxed at the capital gains rate of 15 percent.
- You a void ALL capital gains tax on any appreciated assets you donate.
- You reduced your estate tax liability if your estate is at the taxable level.
- You make a deferred gift to Columbia during your lifetime.
Example
A 70-year-old donor in the 34 percent tax bracket establishes an annuity
trust with $100,000 of appreciated stock, originally purchased for $10,000. Trust pays donor 6.0 percent of the initial value as an annuity
for life. Trust earns an 8.0 percent average total return. Assume IRS discount
rate of 5.4 percent.
Trust principal |
$100,000 |
Income tax deduction |
$47,168 |
Income tax savings (34 percent) |
$16,589 |
Cap. gains tax savings (15 percent) |
$13,500 |
Annual income |
$6,000 |
Projected after-tax benefit to donor |
$70,247 |
Projected benefit to Columbia |
$160,649 |
PLEASE NOTE: These examples are for illustrative purposes
only and are not intended as legal or tax advice. Consult your own legal
and tax advisors prior to making any material decisions based on this data.
For More Information
E-mail
us, complete the Personal Illustration
form, or call us at 800-338-3294.
PLEASE NOTE: Gifts of appreciated securities and other property must have been held by the donor for one year in order to receive a full fair market value tax deduction.
- You receive an immediate income tax deduction for a portion of your contribution to the trust.
- You pay no capital gains tax on any appreciated assets you donate.
- You or your designated income beneficiaries receive stable, predictable income for life or a term of years.
- You make a significant gift that benefits you now and Columbia later.
Office of Gift Planning
gift.planning@columbia.edu
475 Riverside Drive
New York, NY 10015
(800) 338-3294
