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Deferred-Payment Gift Annuity

The deferred-payment gift annuity involves the current transfer of cash or marketable securities in exchange for which NYU Langone agrees to pay the donor an annuity starting at a future date—usually at the donor's retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.

You realize an immediate charitable deduction for the gift portion of each transfer to the deferred gift-annuity plan. A portion of each annuity payment, when the payments begin, will be a tax-free return of principal over the life expectancy of the annuitant. When appreciated long-term capital-gain securities are transferred, any reportable capital gain is spread out over the donor-annuitant's life expectancy.

Deferred-Payment Charitable Gift Annuity Diagram

Benefits

  • Payments for life that are favorably taxed
  • When gift is funded with cash, part of payment will be tax-free
  • When gift is funded with appreciated property, part will be taxed as capital gain, part will be tax-free, and part will be taxed as ordinary income
  • Federal income-tax deduction for a portion of your gift
  • Gift will provide generous support for NYU Langone

How It Works

  1. Transfer cash or other property to NYU Langone
  2. NYU Langone agrees to make payments for the life of one and up to two annuitants (payments are backed by our entire assets)
  3. The balance of the transfer inures to NYU Langone

NYU Langone Health Guidelines for Charitable Gift Annuities

  • The minimum gift amount is $10,000.
  • The maximum gift amount is $250,000.
  • The minimum age of a life-income beneficiary for a single-life CGA is 70.
  • For a two-life gift annuity the minimum age of the younger life-income beneficiary is 65. 
  • For a deferred-payment charitable gift annuity the minimum age of any life-income beneficiary is 65 at the date of contribution and 70 at the date of the first deferred payment.

Example: Mr. and Mrs. Cullen, both 55, wish to supplement their retirement income with deferred-payment gift annuities. After consulting with their own financial advisors and a member of our staff, they decide to contribute $25,000 each year for the next ten years to NYU Langone's gift-annuity program.

The tax and financial benefits of this arrangement to the Cullens are as follows:

  • Under the deferred-gift arrangement, the Cullens are entitled to a charitable deduction for each annual contribution. While the deductions vary from year to year, the total charitable deduction over the ten-year period, based on current IRS mortality and interest assumptions, will be approximately $54,000 (21.6% of the amount they contribute over the ten-year period).
  • At the age of 65, when retirement income becomes important, the Cullens will receive $12,550 each year from their well-planned annuities. In addition, a portion of those payments will be excludable from their taxable income for their life expectancy.
  • Unlike a qualified retirement plan, there are no upper limits to their contributions or other restrictive requirements on the design of the plan.

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Disclaimer: The information provided is general in nature and may not apply to all individuals. This information does not constitute legal or tax advice. We urge you to consult with your personal tax, financial, and legal advisors concerning the specific consequences of making gifts to NYU Langone Health. We would be pleased to discuss, in confidence, ways in which you may support NYU Langone Health.