Charitable Gift Annuity

Definition of "Charitable gift annuity"

Donation of amount "A," made by donor X to a charity. The charity agrees to pay donor X an amount ("B") for the rest of donor X's life. Since the donation is used to fund an annuity, only a percentage of the donation can be taken as a tax-deductible gift in the year of the donation. The percentage taken is based on the Internal Revenue Service tables at the donor's age at the time of the donation. This gift is irrevocable. Since the donor is dependent on the charity to make the income payments, the donor should ascertain the financial ability of the charity to make those income payments. Thus, such an annuity permits the donor to transfer appreciated property to a charitable organization in exchange for the organization's promise to pay a continuous stream of income.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Authorization to borrow from the U.S. Treasury by the issuance of notes to the Treasury. The Secretary of the Treasury must approve the notes and their interest rates. The PBGC must be self ...

Attachment to a property insurance policy to protect the interest of the mortgagee in the mortgaged property. If the property is damaged or destroyed, the mortgagee is indemnified up to his ...

Additional amount of accidental death and dismemberment insurance not provided by the employee benefit plan (standard group life plan) that may be chosen by the employee. Generally, the ...

Federal statute that permits the self-employed a 100% tax deduction for the family health care expenses to include health insurance premiums, disability INCOME insurance premiums, and ...

Authority derived from an agent's contract with an insurance company. ...

Hospital charges in addition to room and board. Miscellaneous expenses are covered under a basic hospital plan, with the limits of coverage expressed either as a multiple of the daily ...

Insurance policies covering various business risks. ...

Total of operating income plus realized capital gains (losses) from investment and underwriting operations minus federal income taxes. ...

Same as term Office Burglary and Robbery Insurance: coverage for the office of a business, or an individual in a general office building or other structure. Includes burglary of a safe; ...

Popular Insurance Questions