If you established a gift annuity to a charitable organization from which you're receiving periodic payments, you have Pennsylvania taxable income. Charitable gift annuities report their income as interest income on Line 4 of Pennsylvania Schedule A using the amounts reported or included in gross income for federal income tax purposes (ordinary income and capital gains income), regardless of when they began reporting the income from that charitable gift annuity. If a charitable gift annuity is exchanged or sold in the future, the Pennsylvania basis in a charitable gift annuity will be different from the federal basis for charitable gift annuities from which payments began prior to January 1, 2005. Income from the sale or exchange of a charitable gift annuity is reported on Pennsylvania Schedule D.