Charitable gift annuities and charitable remainder trusts are the two most popular life-income tools. Both provide opportunities for you to secure an income stream — for yourself or others — while enjoying significant tax savings and making a lasting impact through Pomona College’s educational mission.

Charitable Gift Annuity (CGA)

A CGA is a simple contract between you and Pomona College promising to pay a fixed amount for life to you or someone you choose in exchange for your gift of cash or stock. If you want the security of fixed dependable payments for life, are at least 60 years of age, and are considering a gift of $25,000 or more, a CGA could be an excellent choice for you. Beyond the advantages of secure lifetime payments, benefits can include: 

• Immediate Income Tax Savings: You receive an immediate income tax charitable contribution deduction in the year you make your gift.
• Tax-Advantaged Payments: A part of your annuity payment each year is considered a tax-free return of principal, which reduces your income tax in future years.
• Savings on Capital Gains Tax: If you contribute appreciated stock, you can avoid and defer capital gains tax that you would owe if you sold the securities yourself.

Charitable Remainder Trust (CRT)

Like a CGA, a CRT provides income to you or others for life or a set period of years — but the CRT also provides expanded tax benefits and the added potential for growth in the payment amounts. It’s also a good choice if you are considering a contribution of $100,000 or more. The income tax advantages of a CRT include:

• Larger Immediate Income Tax Savings: You receive an income tax charitable contribution deduction when you contribute to your CRT, but the deduction amount with a CRT is often larger than with a CGA.
• Savings on Capital Gains Tax: You pay no capital gains tax when you give appreciated assets (like stock or real estate) to your CRT. This avoids or defers capital gains tax and allows the full value of your assets to be reinvested in a balanced portfolio to produce income.

Not sure which option is right for you? The Pomona Plan team will help tailor life-income solutions — whether an annuity, a trust, or both options together — that address your unique tax considerations, financial needs, and philanthropic goals. Contact us today.