In this case, you can exchange an asset for income—giving the asset and retaining the interest on the asset contributed. You would receive a current charitable income tax deduction for the remainder portion to the non-profit. The giver may avoid capital gains taxes on the contributed assets. The giver may realize estate tax deduction on remaining assets distributed to the non-profit.

A CRT pays variable income (fixed % of the annual value) to the non-charitable income beneficiary (you, the giver) for life and/or a period not exceeding 20 years. This allows the giver to provide payments to themselves or named beneficiaries while giving to charity. The CRT may avoid capital gains tax if the giver contributes appreciated assets. The remainder value of the trust is distributed to your designated charities. The CRT is tax-exempt and does not pay tax on income earned in the trust.

The CGA is a contract between the giver and the charity. As the giver, you would distribute cash or assets to the church, and the church pays you an annual defined income amount. A portion of the income payment is considered a tax-free return of principle. You would receive a current tax deduction on a portion of the amount contributed. The pay period ends at the giver’s death, and the church retains any remaining funds.