Deferred Gift Annuity
What It Is:
A deferred gift annuity is a simple contract between you and Wilson College.
In exchange for your irrevocable gift of cash, securities, or other assets, Wilson College agrees to pay one or two annuitants you name a fixed sum each year for life, with payments starting at least one year after your gift. The older your designated annuitants are at the time of gift and the longer payments are deferred, the greater the fixed income Wilson College can agree to pay.
In most cases, part of each payment is tax-free, increasing each payment's after-tax value. If you give appreciated property you will pay capital gains tax on only part of the appreciation. In addition, if you name yourself as an annuitant the capital gains tax will be spread out over many years and the first installment will not be due until you receive your first annuity payment.
Payments are usually made annually, semiannually, or quarterly.
- You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 30% or 50% limitation.
- The annuitants you name will receive fixed annual income for life, guaranteed by the general resources of Wilson College, starting in the year you choose.
- If you fund the annuity with an appreciated asset, you will incur tax on only part of the gain. If you name yourself as an annuitant, this tax will be spread out over many years and the first installment will not be due until after you receive your first payment.
- Your estate may enjoy reduced probate costs and estate taxes.
- You will provide generous support of Wilson College.