Charitable Giving -- Part Two of Five

, Ken Davis, CLU, ChFC, CFP, CPA. Ken Davis is the former president of the Phoenix Chapter of the Society of CPAs and has taught continuing education for the Arizona Society of CPAs on life insurance and annuities.

Charitable Gift Annuities (CGA)
Helping retirees help the less fortunate
Increasing income using CGA's
Low interest rates on safe liquid assets
Lifetime guaranteed income
Tax benefits: Amortized basis, Partial deduction, Taxation of Proceeds
Gifting appreciated stock
Limits based on AGI
Income beneficiaries, donor vs. others
CGA examples
Purpose of WRT's
Replacement for kids with single premium life
Using tax savings to set up endowment policy as additional gift to charity
CGA administration
Large charities/Small charities
Community foundations as administrative support
Segue into other sales to increase income and to do legacy planning
Also LTC linked products very popular
Advanced forms of CGA
Gifting stock
No current cap gains on sale by charity
Portion of income now cap gain, exempt and ordinary income
Appreciated real estate is the same
Middle America Estate Planning
Regular Americans pay no estate taxes
Their kids pay income taxes on their largest reservoir of wealth, 401(k) plans at death
Kids forced into high income tax brackets affecting all income
Distributions taxes as high as 40% or more state and Federal combined tax rates
Alternatives for IRA money is to put into qualified retirement plan if they have a business to support this
Then buy life insurance with accelerated benefits riders including LTC
Distribute money and buy life policy with net proceeds
Before 59 ½ use 72 (t) to pay annual premiums
Leave head room in policy with higher face values to dump final distribution after 5 years and age 59 ½ into policy later
Client has equivalent of Roth conversion with liquidity and other benefits

Category:

Education

Tags:

• Charitable Gift Annuities
• Charitable Giving
• Ordinary Income Tax
• Tax Deductions
• Regulation 72T
• Roth Conversions
• Qualified Plans
• Ken Davis
• Steve Savant
• The Business Insurance Zone