If you have (1) appreciated securities, (2) a need for greater cash flow and (3) charitable inclinations, consider a charitable gift annuity (CGA). You’ll receive an immediate charitable deduction; if the donated assets have been held for more than a year, this deduction is based on their full market value.
In addition, you can receive a lifetime income. (Often, the income will cover the life of your spouse, too.) Your upfront deduction will be a portion of the value of the donated assets, based on the amount of income to be paid and the age of the recipients. No tax will be owed on the donated asset’s unrealized capital gains. What’s more, a CGA is simple to implement. You give assets to a charitable organization that accepts gift annuities (many nonprofit organizations are happy to cooperate) and you get back an income stream, based on a table that’s in common use. There are no costs so you can establish a gift annuity for relatively small amounts, perhaps a few thousand dollars.
