Question

donating mutual funds to purchase a charitable annuity

Forum|Forum|1 year ago
February 17, 2025
3 replies
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I have purchased a charitable annuity by donating mutual fund shares with a value of $xxx. The charity estimates it will pay out $yyy over the life of the annuity, so my charitable deduction will be $xxx - $yyy. How do I enter this in TT?

Deduction

S

SabrinaD2

To enter a charitable gift annuity funded by donating mutual fund shares in TurboTax follow these steps:

Log into TurboTax - Open or continue your return. Click on link in Step 2.
Go to donations to charitable organizations.
Select the Yes button to answer the question: Did you make any donations to charity in 2024 ?
If you have an account with ItsDeductible, select Yes to begin the process of importing your donation information; if you select No, continue to the next step.
Select Stock donations
Follow through and answer all questions related to the mutual fund (stock) donation.

J

jcd_3Author

Simply filling out the prompts for stock donations is not correct. For example, if the value of the stock or mutual fund is $10,000 but the charity anticipates paying me $6000 over the course of my lifetime, I do not get credit for a $10,000 donation. Instead, the charity would then say I can claim a deduction of $4000. The prompts that TT provides does not have a way of showing what the value of the shares were and how much of that I can claim as a deduction.

M

Mike9241

That is not the correct amount.

The amount of the deduction is calculated by subtracting the present value of the lifetime payments that will be made to the beneficiaries from the total amount of the original contribution. Present value is based on IRS actuarial tables that determine life expectancy and assumed earnings by taking into account the donation amount and the applicable gift annuity discount rate.

The charity you donated to should be able to assist you with the calculation.

from IRS website

https://www.irs.gov/retirement-plans/actuarial-tables

J

jcd_3Author

Yes it is the correct amount and it is, in fact, just what you describe. I give the charity a certain amount of money, they subtract what they expect to pay back using actuarial tables and the annuity payments , and the difference is my deductible amount. My question is how do I enter these numbers into TT. TT does not seem to have an option to describe these calculations.