• What is a gift annuity?
• Who is the annuitant?
• What are the tax benefits?
• What is ordinary income?
• What is tax-free income?
• What determines the size of each annuity payment?
• Do payments change from year to year?
• What if the annuitant outlives his/her life expectancy?
• Do interest rates or economic fluctuations affect the payments?
• Is the payment the same if more than one person receives payments?
• Is a gift annuity a type of trust?
• Can I have more than one gift annuity?
• Who can benefit from a two-life gift annuity?
• Can a single-life annuity be changed later to a two-life annuity?
• Will my gift annuities be part of my estate?
• Do I have to wait until I retire to receive payments from an Al Sigl Center Charitable Gift Annuity?
• How do I report the annuity payment on my taxes?
• Additional Questions?

What is a gift annuity?
A gift annuity is a simple irrevocable contract between the Donor(s) and Al Sigl Center. The Donor transfers assets to Al Sigl Center and receives fixed payments for the rest of his or her lifetime and/or the lifetime of another person, if desired. When the annuity payments end, the balance of the gift will be used to further the mission of Al Sigl Center’s Partnership. Al Sigl Center or one or more Partner Agencies may be designated as the final beneficiary.

Who is the annuitant?
An annuitant is the person who is the income beneficiary of the gift annuity or deferred gift annuity.

What are the tax benefits?
Since a portion of the gift will be used for charitable purposes, the Donor is entitled to an income tax deduction in the year of the gift. In addition, for a period of time, a portion of each payment may be free of income tax, or taxed at capital gain tax rates that are lower than tax rates on other income.

What is ordinary income?
Income that is subject to ordinary income tax rates. Common sources of ordinary income include wages, dividends, interest, and retirement plan distributions.

What is tax-free income?
Tax-free income is earned income that is not subject to income tax. A gift annuity distributes income that is partially free from taxation. This portion of the annuity is free from taxation because it is deemed a return on principal.

What determines the size of each annuity payment?
A number of factors, including the amount the Donor places in the gift annuity, the age of the annuitant at the time the annuity is created, and in case of deferred payments, the age of the annuitant at the time the payments begin.

Do payments change from year to year?
No. The rate is set and fixed when the gift is made.

What if the annuitant outlives his/her life expectancy?
Annuity rates recommended by the American Council on Gift Annuities are based on life expectancies. Once a gift annuity contract is completed, payments are fixed and will be made for as long as an annuitant lives.

Do interest rates or economic fluctuations affect the payments?
No. Annuity payments are never lowered or raised regardless of changes in interest rates or the national economy. The agreement is backed by all of the assets of Al Sigl Center.

Is the payment the same if more than one person receives payments?
Annuity payments may be made for the lives of one or two persons. Since the combined period of their life expectancies is longer than one person’s life expectancy, the rate of payment will be somewhat lower.

Is a gift annuity a type of trust?
No. A charitable gift annuity is a contractual agreement between the Donor and Al Sigl Center.

Can I have more than one gift annuity?
Yes. In fact, some people create a new gift annuity each year and enjoy higher rates on each subsequent annuity as a result.

Who can benefit from a two-life gift annuity?
Any two people may be designated as annuitants and they need not be related. A gift annuity can be a wonderful gift for a loved one, relative or a special friend.

Can a single-life annuity be changed later to a two-life annuity?
No. The number of persons receiving payments can only be decided at the time the gift is made. The person or persons named to receive annuity payments at the time of the gift can not be changed.

Will my gift annuities be part of my estate?
No. If payments are made to you only, the gift portion goes directly to the designated beneficiary, thus avoiding estate taxes and probate costs. Some gift or state tax may be due if payments are made to someone other than a spouse.

Do I have to wait until I retire to receive payments from an Al Sigl Center Charitable Gift Annuity?
No. Payments can begin at anytime, provided that the annuitant is 55 or older.

How do I report the annuity payment on my taxes?
The annuitant will receive a 1099 R tax form by January 31st for tax filing purposes.

Additional Questions?
If you additional questions about how this program could work for you, please contact
Karen Gaffney at (585) 442-4102, ext. 8980.