Since 2006 it has been possible for individuals aged 70½ or older to make outright charitable gifts from a regular IRA that cumulatively do not exceed $100,000 per year. These gifts, called qualified charitable distributions (QCDs), have two tax benefits: The amount transferred within this limit is not subject to income tax, and the amount transferred, again within this limit, will count towards IRA required minimum distributions (RMDs) if the IRA owner has attained the age when such distributions must begin. These gifts have been particularly appealing to IRA owners who will not need all of their IRA assets for retirement and who would like to help a charitable organization such as ours meet current needs.
Funding Life-Income Plans with Assets from Your IRA Now Possible
There are other individuals with IRAs who have wanted to make a charitable gift to support our work using IRA funds but have hesitated to reduce retirement income. Fortunately, legislation that became effective in 2023 enables IRA owners to make a one-time contribution of IRA funds for a life-income plan that will pay income for life to the IRA owner and/or that person’s spouse. This new legislation is expected to make IRA gifts possible for a larger number of people. Following is a comparison of outright IRA gifts and life-income IRA gifts:
Outright IRA Gifts
Life-Income IRA Gifts
Possibly, you have already been making outright gifts to support our organization from your IRA. If so, we thank you and encourage you to continue. These gifts are greatly valued for meeting present needs. If you would like to explore a life-income fund IRA gift to us, whereby you can sustain both your future income and our mission, we would be pleased to discuss with you the benefits and procedure for arranging such a gift.
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