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A-C | D-K | L-Q | R-Z| List
of Terms
rates
Smith College’s charitable gift annuity rates are based on the recommendations
of the American Council on Gift Annuities, a national non-profit organization that
uses detailed actuarial research into life expectancies to publish suggested annuity
rates for charities. Smith’s chief financial officer adapts the ACGA recommendations
to best suit the needs of the college and its donors.
retained life estate
A donor can give a personal residence, such as a home or condominium, to charity
and retain use of the property for the remainder of her/his life. The donor continues
to live in the property yet takes a charitable income-tax deduction for the “remainder” interest
given to charity. The donor continues to be responsible for taxes, insurance and
maintenance on the property until his/her death. If the donor chooses to move out
of the property, the gift is accelerated and the donor can claim an additional charitable
tax deduction.
split interest gift
A split-interest gift is any gift in which a portion assigned to charity and a portion
benefits the donor or her designee. Charitable gift annuities, pooled income funds,
and charitable remainder trusts are all varieties of split-interest gifts.
step up
A “step up” in [cost] basis means that you have no capital gain in inherited
assets if you choose to sell them immediately. Cost basis is the amount you pay for
an asset such as shares of stock or real estate. This figure is used to determine
how much appreciation (capital gain) you have in an asset.
tangible personal property
The IRS defines tangible personal property as “any property, other than land
or buildings, that can be seen or touched. It includes furniture, books, jewelry,
paintings, and cars.”
unitrust
A standard unitrust pays a variable amount each year. The amount is equal to a predetermined
percentage of the fair market value of the trust that year, at least 5%.
A net income unitrust also pays a variable amount each year. The amount is equal
to the net income produced by the trust that year or a predetermined percentage of
total assets, whichever is smaller. (Trust provision can provide that payments may
be increased in some years to make up for earlier years when net income was lower
than the predetermined percentage.) |
