The Charitable Remainder Annuity Trust pays you a fixed dollar amount annually for life. The fixed payments are determined by the payout percentage selected at the beginning of the trust. You can claim a charitable deduction on your income tax return the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gains or tax-free return of principal.

For example: Mr. John J. Jones irrevocably transfers $500,000 to create a Charitable Remainder Annuity Trust that will provide him with life income payments. Included in the Trust Agreement is the stated payout percentage of 8. He will receive $40,000 annually for the remainder of his life ($500,000 x 8%). If income earned by the Trust exceeds the fixed payment of $40,000, the excess is distributed to Waterfowl U.S.A.