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Lifetime Gift from a Retirement Account
(Gift Example)
The first example illustrates an outright gift from an IRA by a donor over age 70½.
The second example illustrates the costs and benefits of a withdrawal from an IRA by a donor younger than 70½, used to fund a life-income gift.
Example 1
You are 75 years old and your adjusted gross income will total $200,000 this year. Earlier in the year you contributed $100,000 to The ALS Association, so you have reached the limit (50% of adjusted gross income) on charitable gifts you can deduct this year.
You want to provide additional support for a The ALS Association program, so you direct a $100,000 payment from your IRA to us.
Here is a summary of
the costs/benefits of making this gift:
|
| Donor |
Individual,
age 75 |
| Withdrawal
from IRA |
$100,000 |
| Contribution |
$100,000 |
| Income tax on
withdrawal |
$0 |
| Charitable deduction
for withdrawal |
$0 |
| Previous gift
this year |
$100,000 |
| Combined gift
to us |
$200,000 |
| Income tax on
combined gift |
$0 |
Example 2
You are 65 years old. You withdraw $100,000 from an IRA and use it to create a Charitable Gift Annuity, making lifetime payments to you, then paying the remaining balance to The ALS Association.
Here is a summary of
the costs/benefits of making this gift:
|
| Donor |
Individual,
age 65 |
| Withdrawal
from IRA |
$100,000 |
| Contribution |
$100,000 |
| Current
from IRA |
$3,000 (3%) |
| Annuity
payment |
$6,000
(6%) |
| Tax-free
portion |
($2,949) |
| Tax
on IRA withdrawal |
$35,000 |
| Charitable
deduction |
$41,311 |
| Deduction
tax savings @ 35% |
$14,459 |
| Net
tax cost of gift |
$20,541
($35,000 - $14,459) |
| After-tax
income from annuity |
$4,932
/ year |
| Additional
annual income |
$1,932
($4,932 - $3,000) |
For more information
Email us, complete
the personal illustration form, or call us at (888) 949-2577 ext. 212 so
that we can assist you through every step of the process.
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