Gift Annuities

A gift annuity allows a donor to make a substantial gift to The Seattle Lighthouse for the Blind Foundation and receive payments for life plus immediate tax benefits.

With a gift annuity, the donor gives cash or other assets to the Seattle Lighthouse for the Blind Foundation and, in exchange, receives fixed payments in quarterly installments. The size of the payments depends on the size of the contribution and the age of spouse or someone else such as a parent, sibling or friend.

Two key benefits exist under this arrangement:

• The donor receives an income tax deduction. The donor may deduct up to 50 percent of adjusted gross income for cash gifts, and up to 30 percent of adjusted gross income for gifts of other assets, in the first year; the excess may be carried forward for up to five additional years. (The exact amount of the deduction depends on the age(s) of the person(s) receiving payments, the annuity rate and the discount rate under U.S. tax code)
• The annual payments are taxed favorably and a portion of payments from cash gifts will be tax-free for a term of years, based on the life expectancy of the beneficiaries. If a gift is made using appreciated property such as securities or real estate, the donor avoids tax on a portion of the capital gain.

The minimum amount to establish a gift annuity is $10,000, and the person receiving the annuity must be at least 60 years old when the payments begin.

Because payments can also be deferred, gift annuities are ideal for providing supplemental retirement income. Unlike qualified retirement plans, gift annuities have no contribution limit, and the donor receives income and capital gains tax benefits on contributions.

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