Two gift options that pay you income.

Charitable trusts, explained.

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Charitable Remainder Unitrust

A charitable remainder unitrust is a gift plan that allows you to provide income to yourself or others while making a generous gift to All Newton Music School ("ANMS"). The income may continue for the lifetimes of the beneficiaries you name, a fixed term of not more than 20 years, or a combination of the two.

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As a unitrust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a Trustee of your choice. You can select an individual or corporate fiduciary to serve as Trustee.

During the unitrust's term, the Trustee invests the unitrust's assets. Each year, the Trustee distributes a fixed percentage of the unitrust's current value, as revalued annually, to the income beneficiaries. If the unitrust's value goes up from one year to the next, its payout increases proportionately. Likewise, if the unitrust's value goes down, the amount it distributes also goes down. For this reason, it may be to our advantage to choose a relatively low payout percentage so that the unitrust assets can grow, which in turn will allow the unitrust's yearly payments to increase over time.

Payments must be between 5% and 50% of the trust's annual value and are made out of trust income, or out of principal if income is not adequate. Payments may be made annually, semiannually, or quarterly.

When the unitrust term ends, the remaining assets pass to ANMS, to be used for the purpose you designate. You may add funds to your unitrust whenever you like.

Benefits Include:

  1. You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 60%o of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 30olo or 60%o limitation.

  2. You, or the income beneficiaries you name, will receive annual income for life, or for the period you designate.

  3. If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gainrealized in the sale.

  4. Your estate may enjoy reduced probate costs and estate taxes.

  5. You will provide generous support to ANMS.

 

Charitable annuities, explained.

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Charitable Gift Annuity

A charitable gift annuity is a simple contract between you and All Newton Music School ("ANMS").

In exchange for your irrevocable gift of cash, securities, or other assets, ANMS agrees to pay you, or one or two annuitants you name, a fixed sum each year for life. The payments are guaranteed by the general resources of ANMS.

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The older the designated annuitants are at the time of the gift, the greater the fixed income the annuitants will receive. The greater the amount of the annuity the smaller the amount of the charitable income tax deduction.

Payments are usually made in quarterly installments. In most cases, part of each payment is tax- free, increasing each payment's after tax-value. If you give appreciated property you will pay capital gains tax on only part of the appreciation. In addition, if you name yourself as an annuitant, the capital gains tax will be spread out over many years rather than be all payable in the year of your gift.

Benefits Include:

  1. You will qualify for a federal income tax deduction. The deductions for gifts of long- term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 60% of your adjusted gross income. You may take unused deductions of either kind over the next five years, subject to the same 30% or 60% limitation.

  2. You, or the annuitants you name, will receive fixed annual payments for life.

  3. If you fund the annuity with an appreciated asset, you will incur tax on only part of the gain. If you name yourself as an annuitant, this tax will be spread out over many years.

  4. Your estate may enjoy reduced probate costs and estate taxes.

  5. You will provide generous support of ANMS.


Your actual benefits may vary depending on the timing of the gift. While we believe the above information to be correct, we do not guarantee its accuracy and recommend that you consult your tax advisor.