A Little Certainty in an Uncertain World
With the stock market beginning to improve, and rumors that the bull may be getting ready to make another run, many investors are wondering: "Is this for real? Should I stay in or get out?" If you are at least 65 years of age, own stock that has appreciated in value, and have been asking yourself these questions, there is a way you can "lock in" your profits, avoid capital gains taxes, receive regular income, and benefit the Red Cross at the same time! It’s called a Charitable Gift Annuity, and here’s how it works: A donor transfers securities to the American Red Cross, and in return receives a guaranteed income for life, after which the remainder in the annuity account reverts to the Red Cross. The donor avoids capital gains taxes, receives an immediate income tax deduction for part of the contribution, and a portion of his or her income payments may also be tax free!

For example:
Sue Smith, who is 72, has stock valued at $30,000 for which she paid only $10,000 several years ago. The stock currently pays a 2% dividend, providing her with income of about $600.00 per year. She decides to use the stock to fund a Red Cross Gift Annuity. Sue receives an immediate income tax deduction, pays no capital gains taxes on the $20,000 appreciation, and receives income of $2,130.00 (a payout rate of 7.1%) part of which is tax free. The Red Cross guarantees the annuity payments for the rest of Sue’s life, and she will be helping assure that the Red Cross will be there for future generations just as it has been for hers. Best of all, Sue will have the comfort of not having to worry about what the Dow does!

For more information on Charitable Gift Annuities, including the Red Cross in your will, or other estate planning possibilities, please contact Sindee Maxwell, Executive Director, smaxwell@ottawaredcross.org