Mary Elizabeth, age 78, has enough savings to meet her retirement needs. She wants to help the Church with a generous donation but is concerned about her future income with the low interest rates available to her.
She established a $10,000 Catholic Gift Annuity, which specified that the remainder of the annuity balance benefit her local parish upon her death.
- Cash Donated $10,000.00
- Annuity Rate 6.80%
- Annual Annuity Payment $680.00
- Tax-Free Through 2024 $487.11
- Taxable $192.89
- Charitable Deduction $4,826.10
Mary Elizabeth, who itemizes her deductions when filing her tax return, includes the charitable deduction of $4,826.10. At her 25% tax bracket, this generates a tax savings of $1,206.52.
*Information for this example is provided by Catholic Extension Society