Need a tax break next year?

by Fiona Divecha
Manager, Resident Life & Philanthropy

Would you have benefited from a sizable tax deduction in 2016? Consider doing a charitable gift annuity with Riderwood to help ease your 2017 taxes. Additionally, you will benefit from a nice income stream at a great rate. To help your taxes, you will receive two tax benefits.

First is a tax deduction equal to your contribution minus the present value of all the payments that are expected to be made to you based on your life expectancy. In most cases, that deduction is around 40% to 50% of your gift, which is the present value of the amount estimated to go to charity upon your death. This tax deduction can be taken immediately or spread over five years.

Second is built into your annuity payments – a portion of the income you receive will be tax-free throughout your life expectancy since it is considered a return of principal (if you live beyond your life expectancy, it is all treated as ordinary income). You pay ordinary income tax on the rest.

To see if a charitable gift annuity would be right for you contact Fiona Divecha, philanthropy manager, at 301-572-8396 or fiona.divecha@erickson.com. We can create a personalized analysis detailing your annual income stream, your current tax benefits, and your future tax benefits breakdown. Having this information now gives you time to plan your gift and tax benefits anytime this year.

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