Planned Giving Options
Know your options.
Gifts of Stock
Gifts of Stock may generate favorable tax benefits. If you make a gift to Carnegie Museums of Pittsburgh of publicly traded securities that have been held for at least a year and have risen in value since their purchase, you avoid paying capital gains tax and you receive a charitable deduction on your federal income tax equal to the fair market value of the donated securities.
Charitable Gift Annuity
In a Charitable Gift Annuity agreement, Carnegie Museums, in exchange for an irrevocable gift of at least $10,000, agrees to make payments for life to the donor or up to two beneficiaries designated by the donor. The payments usually begin immediately, but they may be deferred to a later date. The amount of the payments is based on the ages of the people to receive the payments (minimum age – 65) and the value of the cash or property given to Carnegie Museums. The payment amount is fixed in the charitable gift annuity agreement and does not change throughout the term of the annuity.
Cash or Publicly-traded Stock
Cash or publicly-traded stock may be used to fund a charitable gift annuity. If the income is to be paid to the donor, capital gains tax on the appreciation in value of any long-term capital asset given to Carnegie Museums in exchange for the annuity is spread out over the life expectancy of the donor, rather than being due immediately. A portion of each payment is tax-free, a portion is taxed as ordinary income, and, if a capital asset is used to fund the annuity, a portion is taxed at capital gains tax rates. The donor receives an income tax deduction for the amount by which the cash or property transferred to Carnegie Museums exceeds the value of the annuity.
Like most charities, Carnegie Museums uses the charitable gift annuity rates suggested by the American Council on Gift Annuities. To determine the annual payment for an annuitant of a given age, multiply the amount given to Carnegie Museums in exchange for the annuity by the rate opposite that age.
For examples of lifetime gifts and to find out if a charitable gift annuity is right for you, take this quiz to find out. Answer True or False.
If your answer to most or all of these questions was True, a charitable gift annuity from Carnegie Museums may fit your needs perfectly.
Charitable Remainder Trust
A Charitable Remainder Trust pays income for life or a period of years to the person who establishes the trust or other beneficiaries named by that person. The amount of the income payments may be fixed, based on a percentage of the initial amount used to fund the trust, or fluctuating, based on a percentage of the value of the trust at the beginning of each year. When the income payments end, the amount remaining in the trust is distributed to the charitable beneficiaries designated in the agreement creating the trust or the most recent amendment to that agreement.
The person establishing the trust receives an income tax deduction for the present value of the anticipated remainder. Whether the payments to the income beneficiaries are taxed as ordinary income or capital gains or are tax-free depends on the type of income earned by the trust.