Charitable Gift Annuity

AAA

DEFINITION of 'Charitable Gift Annuity'

A type of gift transaction where an individual transfers assets to a charity in exchange for a tax benefit and a lifetime annuity. As with any other lifetime annuity, when the beneficiary dies, the annuity payments are stopped, and the charity retains the remaining funds. In a typical charitable gift annuity, the annuity payouts are not limited to the contributed assets, however the actuarial calculations establishing payout amounts usually provide that a large residual amount should remain for the charity after the beneficiary's death.

INVESTOPEDIA EXPLAINS 'Charitable Gift Annuity'

Charitable gift annuities are popular fundraising vehicles. The annuities simultaneously provide a charitable donation, an income tax deduction and a guaranteed lifetime income stream. The charitable donation tax deduction is limited to the amount contributed to the annuity in excess of its present value, as calculated using IRS parameters.



RELATED TERMS
  1. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended ...
  2. Immediate Beneficiary

    A beneficiary designation most commonly used in charitable gift ...
  3. Gift Inter Vivos

    A gift given during the life of the grantor. Following a gift ...
  4. Charitable Donation

    A gift made by an individual or an organization to a nonprofit ...
  5. Charitable Split-Dollar Insurance ...

    Identical to a standard split-dollar insurance plan, except that ...
  6. Subaccount Charge

    Fees charged for the management of an investment fund.
Related Articles
  1. Home & Auto

    Using Life Insurance To Make Charitable Donations

    Your life insurance policy can be a great tool for charitable giving. Find out how.
  2. Taxes

    Cut Your Tax Bill With Donor-Advised Funds

    Beat the tax man come April 15 by investing in a charity-friendly fund.
  3. Taxes

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  4. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  5. Budgeting

    It Is Better To Give AND Receive

    You give to benefit others, but there can be perks for you too.
  6. Insurance

    Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ratings by Weis.
  7. The Treasury and the IRS have issued new guidance on pairing annuities with target date funds.
    Investing Basics

    Guidance On Pairing Annuities, Target Date Funds

    The Treasury and the IRS have issued new guidance on pairing annuities with target date funds. Here's a look.
  8. Year-end tax tips
    Taxes

    7 Ways To Minimize Your 2014 Taxes By December 31

    The year's not quite over yet. See whether taking any of these steps would leave you owing less in 2014 taxes, come April.
  9. Taxes

    What's the difference between cost of goods sold (COGS) and cost of sales?

    Explore the difference between the cost of goods sold and cost of sales listed on an income statement, and what types of companies use one over the other.
  10. Top fund-raising strategies for nonprofit organizations
    Taxes

    Top Fund-Raising Strategies For Nonprofits

    Top fund-raising strategies for nonprofit organizations

You May Also Like

Hot Definitions
  1. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  2. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  3. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  4. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  5. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  6. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
Trading Center