Ways of Giving
Surprisingly, the proceeds of most retirement plans and IRAs left to your family and friends will normally be subject to income taxes, in addition to any estate taxes.
By participating in a "Charitable Rollover" and making any charitable gifts first from your retirement plan at death and giving family other assets may help eliminate any income taxes on these retirement funds.
Who is Eligible?
The law applies to those individuals who are over 71 years of age and are looking to make charitable gifts from their IRAs.
Why Participate in a "Charitable Rollover?"
As with most things in life, there are some limitations. Some may be limited on the amount of charitable gifts they are allowed to deduct and will encounter some of their other benefits phased out as their AGI increases. Another thing to remember is that IRAs are also subject to taxation if withdrawn by survivors, and may also face estate taxes if willed to a loved one. One drawback to many other giving opportunities may be that increases in income will result in higher taxes on Social Security benefits, while others simply may not be in a position to take full advantage of their charitable deductions. This opportunity is an easy and beneficial way to circumvent these obstacles. In addition to the tax-free benefit of the gift, it is also simple to transfer funds directly to the NSDAR.
Provisions to consider provided by Planned Giving Design Center, LLC
- Donors must be age 71 at the time the gift is made.
- Charitable gifts to be made directly from an IRA to the charity.
- An individual can give a maximum of $100,000 in 2008 and/or an additional $100,000 in 2009. A spouse can give an equal amount from his/her IRA.
- Individuals can make as many gifts in any amount to as many charities as desired as long as the total does not exceed $100,000 for 2008 and an additional $100,000 for 2009.
- The gift may NOT be made in exchange for charitable gift annuity or to a charitable remainder trust.
- The gift may NOT be made to a private foundation, donor advised fund, or supporting organization [as described in section 509(a)(3)].
- Donors who have reached age 71 and are required to make minimum required distributions can direct the entire amount (subject to the aforementioned $100,000 limit) to charity in satisfaction of their minimum required distribution.
Other Savings Plans
It may be possible to make similar arrangements by modifying the ownership provisions of bank savings accounts, mutual funds, and other investment accounts. Check with your financial service providers and legal counsel for more information about making gifts in this way.
Please contact the Office of Development for more information at 1 (800) 449-1776 or firstname.lastname@example.org.