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A Charitable Gift Annuity is an easy option that provides you and/or your spouse or beneficiary a fixed sum each year for life while leaving a permanent legacy after death.

At-a-glance:

Make an enduring contribution to the Jewish community.
Enjoy substantial financial benefits. A Charitable Gift Annuity allows you to do both.

By establishing a Charitable Gift Annuity (CGA) through the Lehigh Valley JEWISH FOUNDATION, you will receive a fixed income for life, usually beginning any time after age 65. A portion of the gift qualifies for a current tax deduction, thereby reducing your taxes now, while the full value of the gift is removed from your estate. In addition, part of the annuity payment may be tax-free. The gift annuity may make payments during your lifetime, or may make payments during the lives of both you and your spouse or another loved one. You may also defer the payments from the gift annuity.  Ultimately, the remainder becomes the property of the Federation to meet the critical community needs.

You may use appreciated securities to fund a CGA.  No capital gains taxes are due when the securities are contributed. Instead a portion of your income from the annuity will be subject to capital gains tax, which will be paid over your anticipated lifetime.

A CGA serves as an attractive alternative to many low yield investments, offers several financial and philanthropic benefits, and provides an enduring contribution to the Jewish community.

Example 1: David, age 78, established a CGA with $50,000 cash. It will pay him 7.6%* for his life in quarterly installments. His gift eventually will benefit the Lehigh Valley Jewish community. Itemized income tax deduction: $22,391; annual income: $3,800; how it is taxed: $2,630 tax-free and $1,170 ordinary income for 10.5 years, then all income is ordinary income; effective annual payout rate: 12.4%.

Example 2: Bruce and Ellen, both age 75, own stock valued at $50,000, purchased some years ago for $20,000. They donate the stock to the Lehigh Valley JEWISH FOUNDATION to fund a CGA that will pay them 6.3%* for their lives in quarterly installments. Itemized income tax deduction: $16,529; annual income: $3,150; how it is taxed: $816 tax-free, $1,225 capital gains, and $1,109 ordinary income for 17.6 years, then all income is ordinary income; effective annual payout rate: 9.4%.

*Rates are set by the American Council on Charitable Gift Annuities based on prevailing market conditions. The rate in place when a CGA is established will be used for the duration of the CGA.