Gift of the Month: Charitable Gift Annuities

The Charitable Gift Annuity (CGA) is one of the most popular types of planned gifts. In exchange for a charitable gift of cash or marketable securities, the ATS will pay the donor an income for life. Annuity payments are fixed so that once established the amount of income is not affected by economic conditions, interest rates or inflation.

CGAs usually pay donors who are more than 65 years old a higher return on their investments as compared to a commercial annuity because the CGA has several tax benefits. Moreover, Technion students, faculty and research significantly benefit from CGAs.

The economy is fluctuating now and even though the CGA rates decreased as recently as a few months ago, there is discussion that the CGA rates may decrease again before the year ends. In response to the current economic conditions, the American Council on Gift Annuities will meet for a special session to consider reducing the recommended annuity rates.

What does this mean? If you or someone you know establishes a CGA now, you will lock in at the current rates before any further decrease comes into effect. Even if rates are steady, returns on CGAs exceed those of other fixed-income investments. There are additional benefits including a one-time charitable deduction for the current tax year; a guaranteed income stream for life; and the satisfaction of knowing that the Technion and Israel are being helped.

For more information about this gift option or other planned giving opportunities with the ATS, please contact me at (212) 407-6313 or

Legislative Update: IRS Notice 2008-99 Regarding Charitable Remainder Trusts

On October 31, the IRS issued Notice 2008-99 in which the IRS recognizes a certain type of transaction with a Charitable Remainder Trust (CRT) as a “transaction of interest” under the reportable transaction rules.

A transaction of interest is a transaction that the IRS believes has a potential for tax avoidance or evasion, but for which the IRS lacks enough information to determine whether the transaction should be identified specifically as a tax avoidance transaction. When the IRS has gathered enough information to make an informed decision as to whether a transaction of interest is a tax avoidance type of transaction, the IRS may take further action in order to prevent abuse.

In Notice 2008-99, the IRS identifies the transaction where a donor funds a CRT with appreciated assets, the trust sells or otherwise disposes of the appreciated assets, and the donor and charity then sell their interests in the CRT to a third party. When the third party receives its distributions from the trust, the donor claims no capital gains tax on the appreciated securities.

According to the IRS, parties to this transaction may manipulate the basis rules and coordinate the transaction to avoid capital gains tax.

For an in-depth summary of Notice 2008-99, please click here and here.

We are interested in hearing your comments on this Notice. Have you or your clients engaged in this type of transaction? Are you familiar with this type of transaction? Please let us know your comments by contacting me at (212) 407-6313 or

Charitable IRA Rollover

As you probably have heard, last month Congress extended through December 31, 2009 the Charitable IRA Rollover provision of Internal Revenue Code Section 408(d)(8). Please call me at (212) 407-6313, or email if you'd like a copy of our comprehensive summary of the law, or information about year-end giving options.


All active news articles