Case Study

Elaine Cole, a 75-year-old widow needs to increase her income. Years ago she and her husband purchased stock worth $2,000. Its value has appreciated to $50,000, but it only pays a 2% annual dividend. If she sold the stock, Elaine would have to pay a significant amount of capital gains tax. At her age, if she opens a charitable gift annuity with the RJCEF, she will receive 7.1% annually on her $50,000. As a result of making the gift, she is entitled to an income tax charitable deduction of $23,616.87 (deduction amount will vary over time). She will receive a yearly annuity payment of $3,550. Furthermore, approximately 59.5% of each annuity payment will be tax advantaged for the next 13 years, as it will be seen as a combination of tax-free payments and long-term capital gain.

The Raymond James Charitable Gift Annuity is not considered an investment, but a charitable contribution. In addition, the annuity rates offered by a charitable gift annuity will not be as high as those offered by commercial annuity contracts. However, if you take into account the cash flow the gift annuity will provide, the partial tax deduction, the tax sheltering effect of annuity income streams and the potential to spread out capital gains taxes, gift annuities can be an attractive alternative for donors.

Note: Raymond James does not issue gift annuities in AL, AR, CA, HI, MD, ND, NJ, NY, WA and WI.
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