Planned Giving Insights and Information

New York Maximum Annuity Rates Higher than ACGA Rates in Q4 2022

As was true for the last quarter, there is good news for charities that issue annuities in New York! The maximum annuity rates allowed by New York for gift annuities issued to a New York donor in the fourth quarter of 2022 increased modestly from their third quarter levels. Consequently, as in the third quarter, New York’s maximum single-life annuity rates for Q4 2022 are higher than the corresponding ACGA rates for all male and female ages. This means charities can offer the ACGA rate to New York donors of single-life annuities funded from October 1, 2022 to December 31, 2022, regardless of the annuitant’s age and gender.

Good News About New York Maximum Annuity Rates for Q3 2022

There is good news for charities that issue annuities in New York! The maximum annuity rates allowed by New York for gift annuities issued to a New York donor in the third quarter of 2022 increased significantly from their second quarter levels. They increased enough, in fact, that New York’s maximum single-life annuity rates for Q3 2022 are higher than the corresponding ACGA rates for all male and female ages, even though the ACGA suggested maximum rates increased as of July 1. This means charities can offer the ACGA rates to New York donors of single-life annuities funded from July 1, 2022 to September 30, 2022, regardless of the annuitant’s age and gender.

IRS Announces New Mortality Table for Computing Planned Gift Deductions

On May 5, the IRS finally published proposed regulations that update the mortality assumptions used to compute the value of annuity interests, unitrust interests, income interests, and life estates. The updated mortality table, 2010CM, is based on data from the 2010 U.S. Census. The current mortality table, 2000CM, is based on data from the 2000 U.S. Census. It has been 13 years since 2000CM went into effect, despite a Section 7520 requirement that the mortality table for valuing annuity interests, etc. be updated no less than every ten years. Update: On June 1, 2023, the IRS made public final regulations governing the use of 2000CM and 2010CM. The finalized rules are discussed here.

IRS Announces Indexed Tax Items for 2022

The IRS has announced the values for 2022 of various tax items that are indexed annually for inflation. In general, values have been adjusted upward about 3.0%. Of particular interest to gift planners, the unified gift and estate tax exemption amount will be $12,060,000 ($24,120,000 per couple) in 2022, an increase from $11,700,000 ($23,400,000 per couple). For the first time since 2018, the annual gift tax exclusion will also increase, from $15,000 per person this year to $16,000 per person next year. Also of interest, the standard deduction in 2022 will increase to $25,900 for married couples filing jointly and to $12,950 for single filers, an increase of $800 and $400, respectively. Taxpayers who are 65 or older will qualify for an additional $1,400 in standard deduction on top of that (an additional $1,750 if single and not a surviving spouse). See Revenue Procedure 2021-45 (https://www.irs.gov/pub/irs-drop/rp-20-45.pdf) for complete details, including all federal income tax...