University of Redlands

Plan for Retirement With a Deferred Gift Annuity

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© The Stelter Company The information in this publication is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Ray Watts Associate Vice President for Development (909) 748-8358 Your Income Tax Benefits 1 ] If you itemize, you can secure a federal income tax charitable deduction immediately, equal to the difference between the fair market value of the property or the amount of cash given to the University of Redlands and the value of your gift annuity payments. 2 ] If you fund the gift annuity with appreciated property that you've owned longer than one year, you are not responsible for the capital gains tax at the time of your gift. Instead, a portion of your payments will be taxed as capital gain (provided that you are the primary annuitant and the annuity interest is assignable only to us). 3 ] Part of each annuity payment is tax-free. The tax-free portion of the annuity payment is considered "return of principal" and continues through the annuitant's estimated life expectancy. EXAMPLE Donald, 50, gives us $40,000 in appreciated stock that he has owned longer than one year in exchange for a deferred gift annuity that will begin making payments 15 years from now. His cost basis in the stock is $10,000. Using the suggested rates, Donald's deferred annuity will pay at an annual rate of 7.5 percent, or $3,000. His federal income tax charitable deduction will be approximately $14,649.* If Donald is in the 33 percent income tax bracket, this charitable deduction will result in a tax savings of $4,834. * Assumes annual payments and a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned. Moving Forward We want to work with you to create a gift that best fits your circumstances and our needs. To learn more about the specific financial benefits you can enjoy by creating a deferred charitable gift annuity with the University of Redlands, contact us today. Age Until Age Rate 50 70 9.6% 50 65 7.4% 55 70 8.2% 55 65 6.4% 60 70 7.0% 60 65 5.5% 65 70 6.0% DEFERRED Sample Deferred Gift Annuity Rates for One Person NOTE: Your rate may vary slightly depending on the date of birth and the date of the gift. Contact us for a personalized illustration or for more information.

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