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Definitions - General Gift Planning

Consecutive Beneficiaries

Consecutive beneficiaries are two or more income beneficiaries who receive income from a planned gift as follows. First, the primary beneficiary receives all of the income. When the primary beneficiary dies, the next beneficiary in line receives all of the income. This pattern continues until the last beneficiary dies, at which time the gift plan terminates.

Concurrent Beneficiaries

Concurrent beneficiaries are two or more income beneficiaries who receive income from a planned gift as follows. First, all the income beneficiaries split the income. As each beneficiary dies, his or her share of the gift plan terminates and the surviving beneficiaries continue to receive their share of the income. This continues until the last beneficiary dies, at which time all shares of the gift plan have terminated.

Concurrent and Consecutive Beneficiaries

Concurrent and consecutive beneficiaries are two or more income beneficiaries who receive income from a planned gift as follows. First, all the income beneficiaries split the income. As each beneficiary dies, the surviving beneficiaries split the deceased's share of the income among themselves. This continues until the last beneficiary dies, at which time the gift plan terminates.

Community Foundation

A community foundation is a publicly supported foundation that supports charitable organizations in a specific geographical area. Donations to a community foundation are tax deductible to the same extent as donations to other public charities, such as colleges and hospitals.

Charitable Remainder Value

A gift's charitable remainder value is the present value of the gift to charity at the time the gift is made. The donor of a charitable remainder unitrust, for example, funds a trust that provides benefits to both the donor and the charity. The portion of the initial funding amount that is viewed by the IRS as benefitting the charity is the charitable remainder value.

The charitable remainder value computation is made using the method and tables approved by the IRS. The IRS allows the donor to itemize a charitable tax deduction equal to the gift's charitable remainder value.

Charitable Deduction Carryover

Deduction carryover is the portion of a charitable deduction that a taxpayer can carryover to his or her next income tax return. Carryover, also know as carryforward, arises because the charitable income tax deductions that a taxpayer may take in a year are limited by the taxpayer's adjusted gross income (AGI).

C Corporation

A C corporation is a legal entity that is separate and distinct from its owners.  It can buy, sell, and hold property in its own name and pays its own taxes.  Its liabilities are limited to its own resources; its shareholders are generally not liable for the corporation's debts.  Companies that issue publicly-traded stock are C corporations.

IRS Discount Rate Election Statement

If a donor uses an IRS discount rate that is for either of the two months prior to the month of the gift, she must attach a discount rate election statement to Schedule A of her federal income tax return for the year of the gift.  The election must provide specific information required by the IRS.

IRS Discount Rate

Also known as the AFR or Applicable Federal Rate, the IRS discount rate is used to determine the charitable deduction for many types of planned gifts, such as charitable remainder trusts and gift annuities.  The rate is the annual rate of return that the IRS assumes the gift assets will earn during the gift term.

Investment in Contract

Investment in contract is a term use to describe the value of an annuity interest.

In the context of planned giving, investment in contract is used to describe the present value of an annuitant's income interest in a gift annuity contract.  The value of a gift annuity donor's charitable contribution equals the funding amount of the gift annuity minus the total investment in contract of all of the annuitants.

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