Making a Life Income Gift
Many Options to Choose from Based on Your Goals
By establishing a life income gift, you may receive significant tax benefits and lifetime income.
For donors with appreciated assets such as real estate or stocks, charitable remainder trust are an excellent option. A charitable remainder trust (CRT) can help you:
- Avoid capital gains tax on appreciated assets
- Receive a significant and immediate income tax deduction
- Arrange for annual or quarterly cash payments for you or your designees
- Realize substantial estate tax savings
To establish a CRT with San Bernardino Mountains Land Trust, you select an asset that has appreciated in value and contribute that asset to a trust. The trust then sells the asset, reinvests the proceeds, and provides you and/or your designees with a specified annual percentage payout over a period of time. This payout can be set up for lifetime payments or payments over a term of years. At the end of the period, the trust dissolves and trust assets go to San Bernardino Mountains Land Trust.
There are many types of charitable remainder trusts that can meet a variety of personal, income, tax and charitable gift goals. Your counsel could outline the tax and financial implications of the different types of charitable remainder trusts.
Charitable Gift Annuities
Support the while providing fixed income for life—for you or up to two beneficiaries. May also provide significant tax benefits.
A charitable gift annuity with the SBMLT can provide you and/or another beneficiary with stable income for life. You may also receive an immediate income tax deduction. It’s a gift that benefits nature and your future. Consider organizing your own personal proposal today.
How it works:
- You transfer cash, securities or other property to the SBMLT.
- SBMLT pays you, or up to two annuitants, a lifetime annuity.
- The principal passes to SBMLT after the lifetime of the income beneficiaries.
Benefits:
- You receive an immediate income tax deduction for a portion of your gift.
- Your lifetime annuity is backed by a reserve and the full assets of the SBMLT.
- Your annuity payments are treated as part ordinary income and part tax-free income. If the gift is funded with appreciated property, your annuity payments are also part capital gains income (15%).
- You have the satisfaction of making a significant gift that benefits you now and the SBMLT later.
Deferred Gift Annuities
Provide funds for conservation while meeting future financial needs. Defer your annuity payments and receive higher income payments—for yourself or up to two beneficiaries. This may also provide significant tax savings.
Deferred gift annuities are especially designed for younger donors. This gift makes fixed annual payments to you and/or another beneficiary for life, with payments commencing at a future date. The deferred gift annuity offers the same benefits of simplicity, security, and attractive income taxation that the regular gift annuity provides.
How it works:
- You transfer cash, securities or other property to the SBMLT.
- Beginning on a specified date in the future, the SBMLT begins to pay you, or up to two annuitants you name, fixed annuity payments for life.
- The principal passes to the SBMLT after the lifetime(s) of the beneficiaries.
Benefits:
- Deferral of payments permits a higher annuity rate and generates a larger charitable deduction. The longer you defer payments, the higher the effective rate you will receive.
- You can target your annuity payments to begin when you need them, such as retirement or when a grandchild needs help with tuition payments.
- You have the satisfaction of making a significant gift now that benefits both you and the SBMLT later.
Pooled Income Funds
Secure lifetime income for yourself and deliver significant support to us. Similar to a mutual fund, your gift of cash or securities to our Pooled Income Fund is commingled with those of other donors and you receive a pro rata share of the fund’s dividends and interest.
How it works:
- You transfer cash or securities to the Pooled Income Fund.
- The fund issues you units, like a mutual fund, and pays you, or up to two income beneficiaries, the annual income attributable to your units for life. The principal attributed to your units passes to SBMLT when the last income beneficiary dies.
Benefits:
- You receive gift credit and an immediate income tax deduction for a portion of your gift to the fund.
- You pay no capital gains tax on any appreciated assets you donate.
- Income can exceed dividends you were receiving on the securities you donated.
- You have the satisfaction of making a gift that benefits you now and the SBMLT later.
Remainder Annuity Trusts
Provides income for life and tax benefits. Flexible funding options are available.
How it works:
- You transfer cash, securities or other appreciated property into a trust.
- The trust makes fixed annual payments to you or to beneficiaries you name.
- When the trust terminates, the remainder passes to the SBMLT.
Benefits:
- You receive an immediate income tax deduction for a portion of your contribution to the annuity trust.
- You pay no upfront capital gains tax on any appreciated assets you donate.
- You or your designated income beneficiaries receive stable, predictable income for life or a term of years.
- You have the satisfaction of making a significant gift that benefits you now and the SBMLT later.
Unitrust Gifts
Meet multiple goals with our most-flexible life-income gift. May provide a hedge against inflation. Various funding options are available.
How it works:
- You sell your residence or other property to the SBMLT for a price below the appraised market value, resulting in a transaction that is part charitable gift and part sale.
- The SBMLT may use the property, but usually elects to sell it and use the proceeds of the sale for the gift purposes you specified.
Benefits:
- You receive an immediate income tax deduction for the appraised market value of the portion of the property you donated.
- You pay no capital gains tax on the donated portion of the property.
- You use cash from the sale portion to retire a mortgage or purchase other property.
- You have the satisfaction of making a significant gift to the SBMLT during your lifetime.
If would like more information about Life Income Gifts, please email us at [email protected].