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Planning Your Legacy

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Case Study

The following is an illustration of how this type of donation works.

Sandy, aged 72, has an IRA she created when she rolled her retirement plan over shortly after retiring. Her required minimum distribution in 2013 is $9,500. She has the choice of taking the $9,500 distribution and paying income tax on the funds, or, under the charitable IRA legislation, Sandy can give this amount directly to her favorite qualified charity. If she does this, Sandy will not have to pay income tax on the $9,500. Sandy decides that because she doesn’t need the distribution, she will have it transferred directly to her favorite charity.

Sandy can transfer the amount from her IRA anytime on or before Dec. 31, 2013, and she will avoid paying income tax on the $9,500. She will not, however, be able to use it as a 2013 charitable income tax deduction. But the benefit is twofold:
  • She won’t have to face the tax complications by adding $9,500 to her adjusted gross income.
  • She can witness the benefits of her generosity by giving now while she is alive.
The renewed charitable IRA rollover gives her an easy and convenient way to support us without tax complications.

Light BulbQuick Tip
If you have not yet taken your required minimum distribution, the charitable IRA rollover gift can satisfy all or part of that requirement up to $100,000.

For More Information
It is wise to consult tax professionals if you are contemplating gifts under the extended law. Please feel free to contact Deb Stallings at 415.398.2333 x103 or with any questions.

Copyright © The Stelter Company, All rights reserved.

The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.

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