There are several types of life income plans, including charitable gift annuities, charitable remainder trusts, and pooled income funds Depending on the type of life income plan you choose, a variety of tax benefits are applicable, including income tax deductions, capital gains tax savings, and estate tax savings. Income tax deduction. An income tax deduction is allowed for the portion of your gift that Children's will ultimately receive. You may use the deduction to offset up to 50 percent of your adjusted gross income annually for gifts of cash, and up to 30 percent for gifts of appreciated property. These limits apply in the year of the gift and for up to five years thereafter until the full deduction has been claimed.
Capital gains tax savings.
If you contribute property that would be subject to capital gains taxes if sold, these taxes will either be eliminated or reduced and paid pro rata as you receive income. Estate tax savings. Contributions to a gift annuity, charitable remainder trust, or pooled income fund are removed from your estate and therefore not part of your taxable estate at death. A gift annuity is a contract between you and the hospital whereby you receive a fixed annuity payment each year for life with the remainder benefiting the hospital. When the contribution is made, the interest rate is fixed depending on your age.