If you are like many individuals, your IRA has increased in value over the years and you have more income than you may need. The IRA rollover gift is a simple and easy way to provide for your favorite charity while not increasing your taxable income. Simply contact your custodian and request that an amount up to $100,000 be transferred to charity. Charity receives a nice gift and you avoid any additional tax and satisfy your required minimum distribution for the year.
Perhaps you are considering your tax planning goals and would like to make a major gift to charity. Like many individuals, your IRA may be the largest asset in your estate. Your CPA may be looking for ways to save taxes. By making an IRA charitable rollover gift of up to $100,000, you can reach your goal of helping charity in a significant way and reducing your taxable income.
If you are over the age of 70½, the Federal government permits you to rollover up to $100,000 from your IRA to charity without increasing your taxable income or paying any additional tax. These tax-free rollover gifts could be $1,000, $10,000 or any amount up to $100,000 this year. The gift satisfies your required minimum distribution for this year.
While you have the opportunity to give through your IRA now, there are other options available for making future gifts from your IRA account to charity.
Bequest of IRA
One option is to designate a charity as the beneficiary of your IRA. This permits you to continue to take withdrawals from your IRA during life and then leave the remaining value of your IRA to charity.
Testamentary IRA Gift Annuity
Another option would be to use your will to fund a gift annuity with your IRA. The annuity will provide your family with income for their life or a number of years and will also provide a nice gift to charity.
Testamentary IRA Unitrust
You could also use your will to transfer your IRA to a special “Give it Twice” trust. These trusts usually provide income to children for up to 20 years. Once all the income has been paid to family, the remainder of the trust is given to charity.
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