PG Calc Blog

Flip CRUTs and Deferred Gift Annuities – Know the Difference

Clients sometimes ask us how their donor can establish a deferred charitable remainder unitrust (CRUT). The donor would like to transfer the funds now, receive the charitable deduction now, but delay receiving payments until a later date. The presumption is that the CRUT can be structured in such a way that payments will only begin upon a specified date in the future. Unfortunately, in this situation we must say, “No, that cannot be done.” While the qualified charitable remainder unitrust can be structured in a number of different ways, the deliberate delaying of payments is not allowed. The trust can be written with annual payments, which might allow for as much as a year between the funding date and the first payment, but that is as long as payments can be delayed. And that would mean that all future payments would also be made annually, which may not be appealing to the donor. If it sounds like the donor should consider funding a deferred charitable gift annuity (DCGA), that is...

BDQ #10: Retained Life Estates – Who Says You Can’t Have Your Cake and Eat It Too?

No doubt you, as a gift planner, know why a gift of appreciated property is more advantageous than a gift of cash. You’ve even said something like, “Cash is the worst thing you can give. Don’t you have anything that’s worth more than you paid for it?” For many donors, their home is one of the most highly appreciated assets they will ever own. But there’s a rub: their home is also highly useful as a personal residence and, if they give it away, they’ll have to find another place to live. So, donors aren’t encouraged to think of their home as a potential contribution. But what if there was a way for your donor to give their personal residence now and continue to live there and enjoy it for the rest of their lives? Enter the redoubtable but often overlooked Retained Life Estate. This gift plan allows your donor to contribute their personal residence now but continue to use the property for the rest of their lifetime. They’ll get an income tax deduction now and, if they decide to move out...

Dancing with the Taxman: Tax Reporting of Qualified Charitable Distributions

The Qualified Charitable Distribution (QCD) from an IRA has become a popular way for donors who are 70 ½ or older to make charitable gifts. Financial advisors routinely tell their clients that charitable gifts via a QCD are a tax-smart way to make those gifts. Problems Reporting QCDs Unfortunately, QCD donors have found the guidance on how to report QCDs on their tax returns muddled. The problems have been two-fold.

Flexible Joints – Concurrent and Consecutive Joint Annuitants

Charitable gift annuities (CGAs) provide annuity payments to one or two annuitant(s) for their lives, and the remaining assets become the charity’s property when the annuitant(s) pass(es) away. The annuity payout rate is calculated based on the life expectancy of the annuitant(s). The annuity payment amount is determined by multiplying the annuity payout rate times the amount of the initial gift funding the CGA. The annuity payments will remain at the same fixed amount throughout the annuitant(s) lifetime(s). Concurrent and Consecutive (a.k.a. Successive) Joint Annuitants The payout rate for a joint annuity or a two-life annuity is calculated based on the joint life expectancy of the two annuitants. The CGA agreement will specify if the joint annuitants receive annuity payments concurrently (at the same time) or consecutively (one after the other). Annuity payments for concurrent annuitants continue for the lifetime of the surviving annuitant. When one annuitant dies, the annuity...