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CHARITABLE GIFT ANNUITY Expand / Collapse
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Anonymous
Posted 5/26/2006 3:13:04 PM




This is a charitable gift annuity that husband and wife (in California) set up with a school. The husband has died, and the wife is now enjoying the income stream. How should the gift annuity be valued on the Form 706?

1. Is it valued as present value of life estate, i.e. the value of the property in the annuity multiplied by the life estate factor for the age of the wife?

2. Should the income stream be considered in the valuation and therefore the present value of annuity shoud be computed, i.e. annuity payment times annuity factor?

3. The charitable gift annuity person at that school said the gift annuity should not be included on Form 706 at all. Was he correct?

Thanks in advance.
Post #154
Posted 6/12/2006 6:59:29 PM
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The charitable gift annuity is included in Form 706 but should not create any taxable estate because 100% of the value will be sheltered by the charitable deduction and the marital deduction.

I haven't put a charitable gift annuity on Form 706 but I've dealt with CRTs more than once in a similar situation. What you do for a CRT is recalculate the charitable deduction as if the CRT was created on the date of death. The difference between the total value and the charitable deduction will be the marital deduction.

I hope this helps.

Mary Kay Foss

Post #155
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