Charitable Remainder Annuity Trust
(Gift example*)
Example
A 70-year-old donor in the 35% tax bracket establishes an annuity trust with $100,000 of appreciated stock, originally purchased for $10,000. Trust pays donor 6.0% of the initial value as an annuity for life. Trust earns an 8.0% average total return. Assume IRS discount rate of 5.8%.
Trust
principal |
$100,000 |
Income
tax deduction |
$47,168 |
Income
tax savings (35%) |
$16,589 |
Cap.
gains tax savings (15%) |
$13,500 |
Annual
income |
$6,000 |
Projected
after-tax benefit to donor |
$70,247 |
Projected
benefit to the University of Connecticut Foundation |
$160,649 |
PLEASE NOTE: These examples are for illustrative purposes
only and are not intended as legal or tax advice. Consult your own legal
and tax advisors prior to making any material decisions based on this data.
For more information
Email
us, complete the personal illustration form,
or call us at 860.486.6135 so that we can assist
you through every step of the process.
Hal C. Reed, JD, CFRE
Assistant Vice President for Planned Giving
The University of Connecticut Foundation, Inc.
Storrs, CT 06269-3206
Telephone: 860.486.6135
Toll-free: 800.269.9965, Extension 6135
Facsimile: 860.486.1615
E-Mail: hreed@foundation.uconn.edu
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