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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 Riley Children's Foundation, 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 Riley Children's Foundation 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 Riley Children's Foundation.
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 1.877.TO.RILEY so
that we can assist you through every step of the process.
Riley Children's Foundation
30 South Meridian St. Suite 200
Indianapolis, IN 46204-3509
1.877.TO.RILEY | Fax: 317.634.4478
E-mail: plannedgiving@rileykids.org |
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