Global Health Nexus, Summer 2002

The Magic of Planned Giving

Transforming Investment Opportunities Through a Charitable Gift

Today’s market uncertainties create a dilemma for many investors. If you have held stock over the long term, you may still have paper profits. If you wish to sell shares now and reinvest, you will lose much of your investment to the capital gains tax. And it won’t be easy to find an investment that pays high income in this market.

But there is a charitable alternative that saves taxes and returns a high level of income to you. Instead of selling your stock, consider making a gift to support the College’s Transformations campaign through the NYU Charitable Gift Annuity. NYU will pay you a high level of income. You avoid capital gains taxes and obtain an immediate income tax deduction. And your entire gift will work to earn a high level of income for you—and ultimately support the future of the College of Dentistry.

For example, if at age 76 you contribute to the College $100,000 of stock that you had purchased for $20,000, the NYU gift annuity will pay you income of $8,000 for the rest of your life (the annuity rate is based on your age). This annuity rate is much higher than current market rates for bonds and CD’s. The following chart compares the advantages of the Charitable Gift Annuity with the income and tax results of selling the stock and reinvesting the proceeds in a bond that pays income at 6%.

 Charitable Gift Annuity 8%Sell and Reinvest: Bond 6%
Gross Principal $100,000 $100,000
Capital Gains Tax (20%) -0- $16,000
Net for Gift/Investment $100,000 $84,000
Annual Income $8,000 $5,040
Charitable Deduction $41,000 -0-
Income Tax Savings $15,825 -0-
After-Tax Cost $84,175 $100,000
Effective Yield 9.5% 5%

You can establish a Charitable Gift Annuity with a gift of as little as $5,000. NYU life-income gifts can be designed to accommodate a wide variety of financial needs and objectives. We invite you to talk with us about how a life-income gift can work for you. For more information, call Alan Shapiro, Esq., Director of Gift Planning, at (212) 998-6960.