IRS Applicable Federal Midterm Rate for February 2010 is 3.4%.

What is the discount rate anyway?

In this issue:

• Featured Topic: The Charitable Installment Bargain Sale
• Quick Tip: PG Calc’s Webinars Offer Affordable Staff Training
• Help Clip: PGM Tool Computes Blended Federal and State Income Tax Rate
• How to Use PGM’s Deduction for Gift Annuity Termination Tool
• PGM Offers Three Approaches to Computing Federal Estate Taxes
• GiftWrap’s State Reserve Rates Updated to Include New Hawaii Rates
• The YMCA of Metropolitan Los Angeles Benefits from PG Calc’s Consulting Services
• Webinar: Charitable Lead Trusts – Overview and Case Studies – January 28
• Upcoming Group Training Sessions – February 1-2, New York, NY

The Charitable Installment Bargain Sale
A charitable installment bargain sale combines features of the bargain sale and the gift annuity. This arrangement can be attractive when a charity doesn’t have the current cash flow to purchase the donor's property in one payment or the donor prefers to receive cash flow over a term of years. This underused planned giving tool could provide substantial benefits to your organization. 

Learn more...

Past topics...

Quick Tip: PG Calc’s Webinars Offer Affordable Staff Training
PG Calc Webinars are interactive multimedia presentations delivered via the Internet and telephone to your office or conference room. Our Webinars, presented by experts in the field, cover important topics in gift planning that range from introductory to advanced. All you need to participate is an Internet connection and a telephone, and there is no limit to the number of attendees at your site. Sign up for the entire 2010 Webinar series and save $380.

View our 2010 schedule and learn more

Help Clip: PGM Tool Computes Blended Federal and State Income Tax Rate
The income tax savings enjoyed by a planned gift donor depends on the donor's combined federal and state income tax bracket, as well as the amount of the deduction. Combining these two tax brackets is not as simple as adding the two together, however, because state income tax is deductible from federal taxable income.

To simplify your computation of a blended federal and state income tax bracket, Planned Giving Manager (PGM) includes a function in its Tools menu that can compute the blended rate for you. You can then enter the blended rate, as appropriate, in PGM's First Year Analysis, Life Income Projections, and Lead Trust Projections programs.

Learn more...

How to Use PGM’s Deduction for Gift Annuity Termination Tool
There are two situations in which an additional deduction may need to be computed at the time a gift annuity terminates: when the last annuitant dies prior to reaching life expectancy and when an annuitant reassigns his or her annuity interest to the issuing charity. Planned Giving Manager's (PGM) Deduction for Gift Annuity Termination tool handles both of these situations.

Learn more...

PGM Offers Three Approaches to Computing Federal Estate Taxes
Despite expectations that Congress would pass federal estate tax legislation in 2009 that would prevent this tax from expiring in 2010, for the moment, there is no federal estate tax on estates whose owners die in 2010. If Congress does nothing in 2010, this tax will return to 2001 levels of a $1 million exemption and 55% top bracket in 2011 and beyond. On the other hand, many in Congress have stated that they would like to reinstate the federal estate tax at roughly 2009 levels of a $3.5 million exemption and 45% top bracket, perhaps retroactively to the beginning of 2010. In short the future, and even the present, of federal estate tax is unusually murky right now.

The good news is that Planned Giving Manager (PGM) provides three ways to compute federal estate tax.

Learn more...

GiftWrap’s State Reserve Rates Updated to Include New Hawaii Rates
A message was sent to GiftWrap users on January 5, 2010 that included instructions and a download link to update the State Reserve Percentage table in GiftWrap. The update incorporates Hawaii’s recent change in methodology for calculating charitable gift annuity (CGA) reserves. The Hawaii Department of Commerce and Consumer Affairs issued Memorandum 2009-2A on November 2, 2009 directing a change in the mortality tables and maximum valuation interest rates for computing reserve requirements. The change in methodology affects any charity registered to issue CGAs in Hawaii.

The 2009 maximum rates for HI are:

• Immediate payment gift annuities: 6.00%
• Deferred gift annuities (DGAs) deferred up to 5 yrs: 6.00%
• DGAs deferred more than 5 and up to 10 yrs: 5.75%
• DGAs deferred more than 10 and up to 20 yrs: 5.50%
• DGAs deferred more than 20 yrs: 4.75%

In addition to the 2009 rates, the change affects reserve rates for gift annuities issued in years from 1976 to 2009. The updated rates for all periods are included in the updated table.

GiftWrap clients who have not yet updated their State Reserve Percentages table should locate their January 5, 2010 update email and follow its instructions for downloading the latest percentages. If you can't find the email, contact Client Services at 888-474-2252 or support@pgcalc.com and we'll be happy to send you the instructions.

The YMCA of Metropolitan Los Angeles Benefits from PG Calc’s Consulting Services
Dyan Sublett, Executive Vice President, Development and Communications at the YMCA of Metropolitan Los Angeles, says that “The PG Calc team has it all - experienced senior counsel in Frank Minton, and a responsive staff that, together, takes care of everything from gift policy, annuity and trust fund management questions to program development and donor relations. It's reassuring to know they're there. I'm sure our program is stronger because of our partnership."

Whether your planned giving program is brand new or well established, it is often worthwhile to bring in experts to help you develop, evaluate, or optimize your capabilities. We’ve developed a wide range of consulting offerings to meet whatever needs you may have.

Learn more about our Consulting Services
Learn more about the YMCA of Metropolitan Los Angeles

Webinar: Charitable Lead Trusts – Overview and Case Studies – January 28
The average charitable lead trust is funded with more than $3 million. And unlike most other planned gifts, a lead trust can provide financial benefits to charity starting immediately. What’s more, many experts feel that unusually favorable conditions for funding these trusts exist today despite the current uncertainties surrounding the federal estate tax.

If you would like to learn about charitable lead trusts and how they might be an excellent source of funds for your charity or a powerful estate planning tool for your client, join PG Calc President Gary Pforzheimer for his upcoming “Charitable Lead Trusts: Overview and Case Studies” Webinar. Gary will discuss lead trust basics and then illustrate a variety of planning opportunities using case studies. He will also explore why it may be a particularly opportune time right now for donors to be considering one of these gifts.

Date: January 28, 2010
Time: 1:00 - 2:30 pm Eastern
Presenter: Gary Pforzheimer

Register

Upcoming Group Training Sessions – February 1-2, New York, NY
We are offering both our Introductory and Advanced Planned Giving Manager training sessions in New York City in February. Our sessions provide a solid foundation for individuals who are new to planned giving. These classes may also serve to reinforce the skills and knowledge of experienced gift planners.

February 1-2
Gift Planning with Planned Giving Manager
Introductory and Advanced
Residence Inn Times Square, New York, NY

For more information or to register

Keep Your Software Current by Entering the New IRS Discount Rate

To enter the new discount rate in your evaluation copy of PG Calc’s Planned Giving Manager or Gift Annuity Manager software:

-  Select Customize/IRS Discount Rate Table on the Menu Bar
-  Select Add and click Yes
-  Type in the new rate and click Done

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