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Charitable Gift Annuities
(Complete gift description)
Of all the gifts that pay you back, the charitable gift annuity is the simplest, most affordable, and most popular. You make a gift to Pomona College and in return, we agree to make fixed payments to you for life. The gift agreement is a simple contract between you and Pomona College. Your payments become one of our general obligations, fully backed by Pomona's assets. The College's endowment is currently valued in excess of $2 billion. At your death, we apply the balance of the gift annuity to the program you designated when you made your gift.
Gift annuities offer attractive tax benefits:
- First, you receive a charitable income tax deduction for creating a gift annuity, based on the fair market value of the assets you contributed minus the present value of the life-income interest you retained.
- Second, if you fund your gift annuity with appreciated securities, no up-front capital gains tax is payable. Only a portion of your capital gain will be recognized, and the tax will be spread out over your annuity payments. The result? You can contribute appreciated but low-yielding assets and put the entire amount of your gift to work earning lifetime payments for you.
- Third, a portion of your annuity payments will be taxed at a low 15% capital gains rate if you created your gift with appreciated securities. Another portion will be treated as the tax-free return of principal. Only the balance of your payment is taxed as ordinary income to you. This tax treatment, not available on other types of life-income gifts, increases the effective yield of your gift annuity.
Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy. If you live longer, the entire annuity payment will be taxed to you as ordinary income.)
Planning points
- A charitable gift annuity at Pomona College can be created with a gift of $10,000 or more. Gift annuities bring the benefits of a life-income gift into reach for many donors.
- Your gift annuity can make payments to a maximum of two people.
- Gift annuity rates are determined by the age of the beneficiary. Younger donors may find planning benefits in a deferred gift annuity.
For more information
Email us, complete the personal illustration form, or call us at (909) 621-8143 or (800) 761-9899 so that we can assist you through every step of the process.
Pomona College
Trusts and Estates
550 North College Ave
Alexander Hall 235
Claremont, CA 91711
(909) 621-8143 or (800) 761-9899
Fax: (909) 621-8654
pomonaplan@pomona.edu
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