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Deferred Payment Gift Annuity
A deferred payment gift annuity is like an Individual Retirement Account with Wake Forest. A donor establishing such an annuity receives fixed annual income for life, typically beginning when he or she retires.
Annuities may be funded with gifts of cash, marketable securities or other assets. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years. Unlike conventional IRAs, there is no limit on the amount that can be contributed each year.
The deferred payment gift annuity provides immediate income tax savings and future income. Since the guaranteed payments do not begin until a date determined by the donor, contributions will compound tax free, and the annual income the donor ultimately receives will reflect that.
EXAMPLE CALCULATION
Gift of $25,000 cash made by an individual age 50, deferring income for 15 years.
Gift to Wake Forest | $25,000 |
Annual income at 13.5% return
(Fixed income based in part on age of donor
and the number of years income is deferred.) | $3,375 |
Tax-free income | $362 |
Ordinary income | $3,013 |
Charitable income tax deduction | $17,794 |
Estate taxes | reduced |
