What are the tax advantages of life income gifts and bequests?
A. Gifts to the University of North Florida, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are up to 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and only $4,500 to the individual. In the case of life income gifts, a tax deduction for the present value of the “remainder interest” in the donated assets is available. More important, however, is the fact that the sale of appreciated assets used to fund a life income arrangement does not give rise to any income taxes on the sale.
Gifts to Green Empowerment, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are up to 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and only $4,500 to the individual. In the case of life income gifts, a tax deduction for the present value of the “remainder interest” in the donated assets is available. More important, however, is the fact that the sale of appreciated assets used to fund a life income arrangement does not give rise to capital gains taxes on the sale.
Gifts to Norwich, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are as high as 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and $4,500 going to that individual. In the case of life income gifts, a tax deduction for the present value of the “remainder interest” in the donated assets will be given to the donor. In addition, the sale of appreciated assets within a trust used to fund a life income arrangement does not trigger capital gains or other income taxes on the sale.
