As a result, you have the full fair market value of the gifted property available to produce life income for you. In addition, your gift will generate a charitable income tax deduction equal to the present value of your future gift. In the year of your gift, this deduction can be taken up to 30 percent of your adjusted gross income. Any unused part of this deduction can be carried forward and deducted from your income in the same percentage for an additional five years. It did just that over the years.
Hank is completely retired now.
What he would like to do is sell the stock and reinvest it into a portfolio that is diversified and pays more income. He has included Cal Poly in his will. Instead they decide to fund a charitable remainder trust with the stock that will pay out 6 percent to them each year. The stock is then sold and the proceeds invested into a diversified portfolio. In addition, any assets transferred into the charitable remainder trust are considered outside your estate for purpose of federal or state estate taxes.