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:

1. 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 of the tax year.

• 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.    

1. 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.

How it works

1. You transfer a painting, antiques, collectibles or other personal property to OLT.
2. OLT may elect to hold the property and display or use it in the furtherance of its mission.  OLT may elect to sell the property at some point in the future and use the proceeds for its programs.

Benefits

• You receive gift credit and an immediate income tax deduction for the appraised value of your gift and pay no capital gains tax, provided your gift satisfies the "related use" requirements of the IRS.
• In certain cases, you can use personal property to fund a life-income gift, such as a FLIP Unitrust, that benefits OLT and provides you with income now.
• You can have the satisfaction of making a significant gift now to OLT without adversely affecting your cash flow.

Special Note

If you are interested in donating a vehicle, please contact your OLT office for more information vehicle needs.

How It Works:

1. You give shares in a closely held corporation or an investment partnership to OLT. 
2. OLT receives income distributions, and may sell the shares to a third party.

Benefits:

• You receive gift credit and an immediate income tax deduction for the appraised value of the business interests, net of any other liabilities that may pertain to it.
• You may be able to use a business interest to create a life-income arrangement, such as a flip unitrust.
• You have the satisfaction of making a significant gift that benefits both you and OLT during your lifetime.

If you have owned your home, a vacation home, apartment building, retail buildings, acreage, or a ranch for many years, a charitable gift of that real estate can be especially tax-advantageous.  The property may have so appreciated in value over the years that its sale would result in sizeable capital gains tax.  If given to OLT instead, you avoid the tax and, at the same time, realize a charitable deduction for the full fair market value of the real estate. 

You may also wish to consider a gift of your personal residence or ranch, reserving the right to continue to live in the house or ranch property for life (and if applicable, the lifetime of your surviving spouse).   Through such an arrangement, you will be entitled to a current income tax deduction for a portion of the fair market value of the property.

• Types of Real Estate Gifts

OLT accepts two types of real estate gifts — both of which are critical to our work:

• Gifts we call "trade lands" — real estate gifts that donors permit us to sell, with the proceeds going to support our work. Examples of those are mentioned above.
• Land which donors would like to permanently protect through permanent conservation easement or in-fee donation:  
• Conservation Easements
  A most important tool, these binding legal arrangements provide both land preservation and continued private ownership.  Becoming part of the title of the property, such easement restrictions can be tailored to the landowner's interests and, under OLT monitoring and enforcement, remain in effect regardless of future ownership.
• Land Acquisition
  OLT may identify and acquire environmentally-important land for landscape protection according to its Land Conservation Master Plan, generally sought as an outright in-fee donation or acquisition at a bargain price which affords tax deductibility to the seller

OLT is not able to protect or receive all of the real estate that is offered to us for protection through conservation easement, bargain price acquisition or in-fee donation.  The decision to accept or decline land in the San Luis Valley for preservation through conservation easement, bargain price acquisition or in-fee donation is made by OLT’s Board of Directors in conjunction with its mission and Land Conservation Strategic Plan.  If you are interested in making such a gift, please contact OLT’s Executive Director, Doug Bishop.