Special Tax Incentive for IRA Gifts
Temporary legislation allows donors aged 70½ and older to direct distributions of up to $100,000 per year from their IRAs and ROTH IRAs to Orient Land Trust, without incurring income tax on the withdrawal. This is a significant incentive that removes the tax penalty for some donors who want to use their IRAs to fund a charitable gift.
What You Should Know:
- Gifts must be outright — the donor cannot use the distribution to fund a life-income gift such as a charitable gift annuity. Gifts can only be made from a traditional or Roth IRA — other types of retirement plans are not covered by the law.
- If a donor has retirement assets in a 401(k), 403(b) etc., he or she must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to OLT.
- A donor will receive no charitable income tax deduction for the distribution from the IRA. However, gifts from an IRA will not count toward the deduction limitation* for charitable gifts. This means that a donor whose gifts from non-IRA assets have reached his deduction limitation for the year can make an additional gift from his IRA with no penalty.
- Total charitable IRA distributions to OLT, plus any other charity the donor benefits, cannot exceed $100,000 per year.
How it Works:
- Current legislation gives donors aged 70½ and older an opportunity to direct lifetime distributions from their IRAs and ROTH IRAs to OLT without incurring income tax liability on the withdrawal through December 2013.
- Distributions to OLT and other charitable beneficiaries can total $100,000 and must be made outright — they cannot fund a life-income gift. Learn more about this opportunity and how you can make a gift to conservation through your IRA. Alternatively, contact us and we'll be happy to give you more information about this charitable incentive.
- Donors younger than 70½ can make a withdrawal from their IRA or other type of retirement plan, pay income tax on the withdrawal, and donate the proceeds to OLT. These gifts can be made outright or can fund a life-income gift and will generate a charitable deduction for the donor.
(borrowed this picture box from TNC – insert OLT logo on right here and change text to reflect “OLT receives plan tax-free”)
Please note that Orient Land trust cannot render tax or legal advice and we urge you to consult with your professional advisor about your situation before making a charitable gift.