The Jacobs Company; Charitable Planning Uses of Life Insurance

The Jacobs Company
Charitable Planning Uses
Charitable Gift Annuity

When a donor transfers an asset to a charity in exchange for one or two lives, it is called a charitable gift annuity.

The income tax deduction from this arrangement will vary depending on the age of the donor, the payout rate and the applicable (midterm) Federal rate (AFR), which is determined monthly.

The following 3 charts illustrate the income tax deduction at various ages and AFR's. Each example assumes a gift of $100,000. The payouts vary with the age of the donor.

Age 55 //5.9%/$5,900<recommended Payout>6.1% / $6,100 / Age 60

AFR Table Rate	Charitable Deduction	Amt. of annual Income Excluded from Taxation	Charitable Deduction	Amt. of annual Income Excluded from Taxation
6%	$31,632	$2,431	$35,619	$2,714
7%	$37,715	$2,218	$40,851	$2,495
8%	$42,918	$2,030	$45,389	$2,306
9%	$47,403	$1,870	$49,351	$2,135

Age 65 //6.5%/$6,500<recommended Payout>6.9% / $6,900 / Age 70

AFR Table Rate	Charitable Deduction	Amt. of annual Income Excluded from Taxation	Charitable Deduction	Amt. of annual Income Excluded from Taxation
6%	$38,685	$3,146	$43,237	$3,664
7%	$43,170	$2,912	$46,909	$3,422
8%	$47,116	$2,711	$50,189	$3,215
9%	$50,608	$2,535	$53,129	$3,022

Age 75 //7.7%/$7,700<recommended Payout>8.8% / $8,800 / Age 80

AFR Table Rate	Charitable Deduction	Amt. of annual Income Excluded from Taxation	Charitable Deduction	Amt. of annual Income Excluded from Taxation
6%	$46,280	$4,474	$49,911	$5,562
7%	$49,295	$4,227	$52,301	$5,298
8%	$52,025	$3,996	$54,495	$5,060
9%	$54,507	$3,788	$56,516	$,831

This document was last modified on July 26, 1999