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A grantor-retained annuity trust (commonly referred to by the acronym GRAT) is a financial instrument commonly used in the United States to make large financial gifts to family members without paying a U.S. gift tax.
Walton v. Commissioner, 115 T.C. 589 (2000), [1] a decision of the United States Tax Court in favor of taxpayer Audrey J. Walton, "ruled that a grantor's right to receive a fixed amount for a term of years, if that right is a qualified interest within the meaning of Section 2702(b), [2] is valued for gift tax purposes under Section 7520, [3] without regard to the life expectancy of the ...
Then, after the annuity term expires, the principal of the trust goes outright to a charity or charities the grantor named in the trust document. If the trust meets the requirements of the IRS regulations, the grantor of the trust will receive a charitable income tax deduction for the calculated future value of the gift.
An annuity is a financial product that pays out a fixed amount of money, usually in a series of payments. Annuities are popular -- sales of annuities increased by 22% in 2022 as compared to 2021...
The type of annuity you choose — fixed, variable or indexed. Current interest rates. Whether you want payments just for yourself or to continue to a spouse. Extra features you add to the annuity ...
Type of annuity: Different annuity types have different payout structures. Fixed annuities, for example, offer guaranteed rates, while variable annuities fluctuate based on market performance.
An annuity that begins payments only after a period is a deferred annuity (usually after retirement). An annuity that begins payments as soon as the customer has paid, without a deferral period is an immediate annuity. [citation needed]
The annuity market offers several options, and each type comes with its own level of risk and potential growth. Fixed annuities : Offer a guaranteed minimum interest rate , providing stability ...