The following are typical questions about the Charitable Gift Annuity, and serve to provide you with important information about this irrevocable gift arrangement that you should know about before making a gift in this way.

Q. Is the Charitable Gift Annuity a good investment?
A. The Charitable Gift Annuity is an investment in the future of the Kennedy Center and the National Symphony Orchestra. Through its establishment, you or the designated income beneficiary will recieve guaranteed payments for life while ensuring a future legacy for the performing arts. Charitable Gift Annuity's should not be confused with commercial investments.

Q. Is there a minimum amount I must give for a Charitable Gift Annuity?
A. The Center and Orchestra can establish a Charitable Gift Annuity with a minimum donation of $10,000.

Q. Is there a minimum age requirement?
A. Annuitants, those recieving the income payments, must be at least 50 years of age when the payments are to begin. Younger individuals may establish Gift Annuities with the initial payment deferred to after they reach the age of 50.

Q. How much income will I recieve from a Kennedy Center Charitable Gift Annuity?
A. The amount of income depends on three factors:

• Amount Contributed
• Number of income beneficiaries named in the agreement
• Respective ages of income beneficiaries when the annuity is established.
• The prevailing Internal Revenue Service discount rate on the date that annuity is established

Q. How is the Annuity income taxed?
A. Part of your annuity will be tax-free income for a number of years (over your life expectancy according to IRS tables). This portion represents return of principal. If you do not live long enough to collect the total tax-free amount to which you are entitles, the unrecovered amount may be taken as a deduction on your final income tax return. Your executor will take care of this. Some or the entire tax-free portion may be replaced by a long term capital gain income if you make a gift of appreciated securities to establish the Charitable Gift Annuity. Again, we can give you a detailed illustration that shows exactly how the Charitable Gift Income will be taxed to you and a surviving beneficiary (if any).

Q. How much of an income tax-deduction will I get from a Charitable Gift Annuity?
A. Because you, and maybe someone else, are getting a lifetime income from your gift, your charitable income tax deduction is less than the full amount you contributed to establish the Charitable Gift Annuity. The deduction is based on your age and an interest rate the IRS publishes monthly. The higher this interest rate, the higher your deduction. In fact, you can use the highest of these rates in the three-month period that includes the month of your gift and the two previous months. It is the Kennedy Center and National Sypmhony Orchestra's policy that the deduction be equal to a minimum of 50% the original donation. We can provide you with a very close approximation prior to you completing the donation.

Q. What about estate taxes?
A. If you set up a Charitable Gift Annuity with the Kennedy Center for just your own life, the assets you use to establish it will be removed from your estate for fenderal estate tax purposes. If your gift annuity is to make payments to you for life and then to a second beneficiary for life, the value of the second beneficiary's annuity will be included in you estate for federal estate tax purposes. If the second beneficiary is your spouse, his or her annuity will qualify for the unlimited federal estate tax marital deduction.

If you set up a Charitable Gift Annuity that is to make payments to you and another beneficiary jointly and then make all payments to the survivor, the situtation is pretty much the same from a gift and estate tax standpoint. If the other beneficiary is your spouse, his or her right to recieve annuity payments will qualify for the federal gift and estate tax marital deductions.

If you set up a Charitable Gift Annuity just for another person, you will be deemed to make a gift to the other person for federal gift tax purposes equal in amount to the value of his or her annuity. Under current law, if the other person is your spouse, that annuity will qualify for the unlimited marital deduction. You may also wish to talk with you tax advisor about the possibility of claiming the $10,000 annual gift exclusion with respect to the gift to the other person.

Q. What if I use appreciated stocks or bonds to establish a Charitable Gift Annuity?
A. Using securities, rather than cash, to establish a Charitable Gift Annuity will not affect the annuity amount or the income tax charitable deduction. It will, as mentioned above, result in part of the annuity payment being taxed to you as capital gain. In effect, part of the annuity that you would have recieved as a tax-free return of principal is replaced by capital gain. Your reportable gain will be spread out over your life-expectancy and the total amount of reportable gain will be less than the amount you would have to report if you sold the stock.

Q. How secure is the Gift Annuity Payment?
A. The obligation to make gift annuity payments is backed by the full faith and assets of the Kennedy Center.

For More Information:
This report is intended to provide helpful information regarding the Kennedy Center charitable gift annuity program.