| Earning income by giving
Tax incentives for giving
Wills and bequests
How can I create income for retirement?
There are three effective methods of increasing your current or retirement income and at the same time helping Wentworth: A Charitable Gift Annuity, a Charitable Remainder Trust, and a Commuted Payment Gift Annuity.
If you are over 65, you might want to consider a Charitable Gift Annuity. In exchange for your gift of cash, securities, or other assets, Wentworth agrees to pay one or two people of your choice (annuitants) a fixed sum each year for life.
A Charitable Remainder Trust ("Trust") allows you to transfer assets (usually cash, securities, or real estate) to a trustee of your choice, e.g. Wentworth Institute of Technology or a bank trust department. During the Trust's term, the trustee invests the Trust's assets. Each year, the trustee distributes a percentage of the Trust's current value to your beneficiaries. When the Trust's term ends, the Trust's principal passes to Wentworth Institute of Technology, to be used for the purpose you designate. 
If you are under 65, you might want to consider a Commuted Payment Gift Annuity. In exchange for your gift of cash, securities, or other assets, Wentworth agrees to pay one or two people of your choice (annuitants) a fixed sum each year for either a specified number of years or for life. The Commuted Payment Gift Annuity is especially attractive if you are currently earning a high income and you desire both a current tax deduction and also additional income at a later point in your life.
Payments begin at least one year after you make your gift. The payments are guaranteed by the general resources of Wentworth and are usually paid annually or semiannually. The longer payments are deferred, the greater your payments are.
An illustration
Sam and Patty met at Wentworth and graduated together in 1985. They have recently downsized from their family house to a smaller home and need a tax deduction to help balance their capital gains. They also would like to add a fixed income component to their retirement plan and wanted to find a way to give back to Wentworth.
Sam and Patty can make a gift to the Institute through a
Commuted Payment
Gift Annuity or a Charitable Remainder Trust. They will be able to claim a charitable income tax deduction and lock in an advantageous fixed or variable payment to begin later, at age 65. |
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How can I create income (for myself, my parents, my children, or grandchildren) before retirement?
You may be able to simultaneously make a gift to Wentworth and increase your income, especially if you have CDs or stocks that pay low annual dividends.
A Charitable Gift Annuity offers you a way to support Wentworth while locking in a fixed, advantageous rate of return in place of low-interest CDs and money market accounts.
You can also increase your annual income and reduce or avoid capital gains taxes. A Charitable Remainder Trust can alleviate your capital gains tax issues and diversify your investments, while simultaneously making a charitable gift to the Institute which will give you an income tax deduction.
Either of the above options could also be used to generate income for a parent. See an illustration of generating income for a parent.
Also, a Charitable Remainder Trust could be a good option for a child or grandchild. See an illustration of generating income for a grandchild.
You can turn your real estate into income as well. You can produce income for your lifetime or for the lifetime of a loved-one by funding a Charitable Remainder Trust through the downsizing of your primary residence or through vacation property that you no longer want.
How can I transfer assets from one generation to another at significantly reduced gift and estate taxes?
A Charitable Lead Trust can transfer assets from one generation to another at significantly reduced gift and estate taxes, preserving more of your assets for the purposes you choose.
You can create a current stream of income for Wentworth for a period of years, after which the remaining principal can pass to the family members or friends that you designate, such as your children or grandchildren. Wentworth benefits immediately through annual payments from the Charitable Lead Trust that you create, and Trust assets can continue to grow before they pass to the next generation.
I have stocks with capital gains. How can I reduce or eliminate my taxes on these gains?
With an outright gift of stock, you can take an income tax charitable deduction for the full fair market value of the asset.
In addition, if you give your stock to a Charitable Gift Annuity or a Charitable Remainder Trust, you will receive income for life or for a specified number of years, eliminate or reduce your capital gains taxes, and take a charitable deduction for a portion of your gift — all while benefiting Wentworth.
Can I provide for my heirs and make a gift?
You can make a gift to Wentworth now in the form of a Charitable Lead Trust, and direct your income stream to support the areas of the Institute you care about for a set number of years. At the end of the term, the assets, and any growth, will pass to your heirs.
You also can establish a gift paying income to your children. With both options, you save on gift and estate taxes.
Can planned giving help me diversify my assets?
If you are heavily invested in one stock or sector, planned giving can help. You can make a gift of that investment to a Wentworth life income arrangement, eliminate or reduce your capital gains taxes, take an income tax deduction for a portion of your gift, and benefit Wentworth. By doing so, you diversify your source of income in both a tax savvy and charitable way.
I'm not particularly wealthy, but I am charitable. How can planned giving help me?
There's a gift arrangement for everyone. For many, a gift through one's estate is the best way to give. For example, naming a charity as beneficiary of your retirement plan can be a tax-efficient way to make a bequest.
For others, a life income gift can help increase income and save on taxes, making charitable giving an attractive strategy.
I want to leave a bequest. What is the best asset for me to leave?
Qualified retirement plan assets are some of the best assets to leave to charity. Your estate avoids all income and transfer taxes, putting 100 percent of the assets to philanthropic use.
If your spouse and children are currently the beneficiaries of your retirement plan, you can continue to keep them as beneficiaries, and also include Wentworth as the beneficiary of a portion of the plan. Upon your death, the plan administrator can "cash out" Wentworth’s share of the account without affecting your family’s portion of the account, so that Wentworth, and your heirs, benefit from your retirement savings.
View sample beneficiary designations.
What other assets should I consider gifting by bequest?
Stocks, bonds, cash, and tangible personal property such as tools and real estate also make terrific bequest assets. You can either leave them directly to charity, or use them to fund a life income arrangement for one or more heirs.
View sample beneficiary designations.
Can I receive a fixed income through planned giving?
The Charitable Gift Annuity can provide you and/or another income beneficiary with a fixed and guaranteed income for life. Your annuity rate is contingent on your age — the older you are, the higher your annuity rate. The assets of Wentworth Institute of Technology back your annuity payments.
View the annuity rates.
How can I reduce my income tax by making a planned gift?
If you make a planned gift, you will receive an income tax charitable deduction for a portion of the gift. You can use your deduction in the year you make your gift and carry forward any unused portion for up to five additional tax years.
You also may receive some tax-free income from one of our life income arrangements.
We are downsizing and are amazed at how our house has appreciated in value over the past 30 years. We want to profit from some of that growth, but could we also benefit from making a charitable gift?
There are many ways to make a gift of property to Wentworth, each of which has tax advantages. Options include
By gifting a portion of the property to Wentworth, you avoid the capital gains tax on the donated portion of the property.
You also receive an income tax deduction for the appraised value of the portion you donate outright to Wentworth. If you opt for a life income arrangement, you receive a deduction for a portion of the value of your gift, in addition to an annual income.
What tax deduction will I receive for my gift?
Your tax deduction depends which type of donation you make.
Outright gifts (checks and credit card payments) to Wentworth generate a full income tax charitable deduction. Outright gifts of stocks/securities are deductible at fair market value, with no recognition of capital gains – a great tax benefit!
Certain gifts of personal property, e.g. tools and equipment, are fully deductible so long as they are relevant to Wentworth’s mission. Contact us for more information.
Wills/bequests do not generate a lifetime income tax deduction. They are exempt from estate tax, however.
Similarly, life insurance distributions to Wentworth are not income-tax deductible, but are exempt from estate tax. If you have made Wentworth the owner and beneficiary of a policy during your lifetime, however, you may deduct annual gifts that offset premium payments.
The charitable deduction for a gift that returns income to you, such as a Charitable Gift Annuity or a Charitable Remainder Trust, is the fair market value of the gift asset minus the present value of the income interest you retain.
Please note that information and calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on the timing of the gift.
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