Question

How is the amount of my income tax-deduction determined when I make a donation in exchange for a Charitable Gift Annuity?

Answer

The income tax deduction you are entitled to for your charitable donation is less than you would be entitled to for an outright donation because you will be receiving a lifetime income from the gift. The deduction is based on your age and interest rates published by the IRS. The higher this interest rate, the higher your deduction.