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John Williams is a retired farmer, who is 80 years old. He
is unmarried. He set up a Radio Kansas Gift Annuity with a
$100,000 cash gift. He is in the 33% tax bracket.
With Mr. William's age and life expectancy in mind, the standard
rate determined by the American Council on Gift Annuities
would give him an 8% return each year for the rest of his
life.
He will be able to claim a current tax deduction of $49,985
which may result in a $16,495 tax savings for the current
year.
He will receive an annual payment of $8,000 for the rest of
his life. Of that payment, $5,560 will be tax free for the
first 10 years.
On average, Mr. Williams would be expected to receive a total
of $81,600, for an effective payout of 12.9%, while Radio
Kansas is expected to retain the full value of the initial
gift of $100,000.
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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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