Conventional wisdom has been that the gain upon the sale or exchange of an income interest in a charitable gift annuity is taxable as ordinary income. If the donor gifted his income interest to charity, he would only be able to deduct his investment in the contract as a charitable contribution, as amounts attributable to ordinary income are not deductible under Section 170(e) of the Code. We believe the authority for this proposition is debatable. This presentation considers how income interest in a CGA may be an attractive asset for donation to charity under the right circumstances.
Emanuel Kallina II
National Conference on Philanthropic Planning
Honing Skills, Getting Oriented, Expanding Expertise
NCPP2010_kallina-koenig.pdfNew description186 KB
Syllabus 5.0, NCPP2010