You are entitled to a charitable income tax deduction in the year you make the gift. Again, the longer the payments are postponed, the greater the deduction. Because the age at which payments are to begin is used to determine the charitable deduction, it is not possible to change the deferral period after annuity begins. CARE follows rates recommended by the Committee on Gift Annuities, a professional association of charitable organizations. Once it is determined, the deferred gift annuity rate will not change.
Payments represent both interest and a return of principal.
The portion of the principal returned with each payment accounts for the tax-free part of the annuity payment. In addition, all of CARE's unencumbered assets stand behind every payment. You can choose to receive payments once, twice or four times a year. You can use cash, securities or real estate, as permitted by state law. You avoid capital gains tax on that part of the property that is considered a gift.