Combining a Life Income Plan and an Asset Sale = Immediate Cash

Although the stock market has been up and down in recent years, many Americans hold blocks of highly-appreciated stock. Most likely, some of your organization's potential donors would like to cash in on their gains while they still have them and minimize their taxes in the process.

A charitable remainder trust or a gift annuity might be a solution, but what if your prospect wants cash immediately, too? A life income plan alone won’t do it.

A Solution

One solution is for the prospect to:

1. Sell the desired stock, and

2. Fund a life income plan with enough stock that the resulting income tax savings sufficiently offsets the capital gains tax owed on the sale of stock.

Between the two transactions, the donor will get the cash he or she wants upfront, reduce or eliminate the capital gains tax owed on the sale, lock in income for life, and make a generous gift to your organization.

You can illustrate the benefits of the plan in PG Calc's Planned Giving Manager software by using the Sell part and give part model in Life Income Projections (Program 3).


A donor’s desire for immediate cash should not eliminate a planned gift from your thinking.  Combining a life income plan, such as a charitable remainder unitrust, with a sale of assets can be an excellent way to meet the needs of a donor who wants both immediate cash and income in the future.