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Bob Barker owns a small business, and is 61 years old. His
wife, Denise, is 60. They set up a Gift Annuity with Radio
Kansas with $50,000 in cash. They are in the 35% tax bracket.
With the ages and life expectancies of both in mind, the standard
rate determined by the American Council on Gift Annuities
would give them a 5.5% return each year for as long as one
of them lives.
They will also receive a current tax deduction of $11,526
which may save them $4,047.
They will receive an annual payment of $2,750 for as long
as one survives. Of that payment, $1,339 will be tax free
for the first 29 years.
In the end, Radio Kansas is expected to receive the full $50,000
amount from the annuity with no probate fees and no estate
taxes. On average, the Barkers would be expected to receive
a total of $83,600, for an effective payout of 7.6%, while
Radio Kansas is expected to retain the full value of the initial
gift of $50,000.
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All of these figures
are estimates, offered here strictly as an example. Radio
Kansas cannot offer tax or legal advice. Please consult a
tax advisor for final figures in your specific situation.
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