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Loki:

I think you don't have it quite right. You get to take a third of the gift the first year, and the rest is a prorated deduction over the next 16 years, I believe. We have two gift annuities, and that's the way we are told it works. We sold half our PFE holdings in which we had a large capital gains to take advantage of this first-year deduction. I don't know if your mother has anything equivalent to do, but she hasn't much time to make a decision.

She may not be able to take advantage of the following 16 year period because the automatic deduction is quite large. If she were to die (perish forbid) during this period, however, you might be able to take some advantage of it as I presume (but don't know for sure) that your wife can assume the annual deductions.

Incidentally, the older you are (ie, the less your life expectancy) the greater the interest rate you get. It might have been better for the mother to have taken the gift annuity by herself and give your wife a gift annually if she didn't need the money. My wife and I took ours out when we were 74 and get 6%, for example.

braced
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