Planned Giving
In 2015 the President signed into law a permanent IRA Charitable Rollover provision, allowing persons aged 70½ and older to donate as much as $100,000 from IRA account assets to nonprofit organizations such as Tyler’s Hope. These donations will count as part of the IRA required annual payout (RMD). Although the amount contributed to the charitable organization is not tax-deductible, the IRA account holder will be able to exclude the amount contributed to the charitable organization from the IRA from their gross income. The provision is retroactive back to January 1, 2015 so that distributions made before December 31 can be excluded on 2015 tax returns filed next year and because the provision is now permanent, IRA Charitable Rollover distributions can be made at any time in the coming years.
Your donation to Tyler’s Hope provides resources to find a cure for Dystonia. Your legacy through Planned Giving will ensure that children with Dystonia can look forward to the future and all the joys of life. Whether for the search for a cure like Tyler’s Hope or for any other worthy cause, it is important to know the types of gifts possible, and the tax benefits for you. Although Tyler’s Hope does not offer tax advice, we can be a resource to ensure both you and the charity maximize the benefits of your donation.
Reasons for Making a Charitable Gift
People make gifts or bequests to charitable organizations for a number of reasons. Some of the more common motivations would include compassion; desire to leave a legacy; commitment to a cause; and simply a wish to use one’s fortune to benefit another’s misfortune. Whatever the reasons, U.S. tax law is designed to encourage these gifts.
Financial Benefits of Charitable Gifts
- Donations to charitable organizations can:
- Provide an income tax deduction
- Reduce or delay payment of capital gains tax
- Increase personal after-tax cash flow
- Decrease the size of your taxable estate; increase the amount passed on to heirs
Gifts That Pay You Income
Do you want to make a gift right now, but worry about having enough income to support your lifestyle? Life-income gifts provide donors with an income stream and significant tax-savings, while also providing Tyler’s Hope with substantial long-term resources. The following are popular tools for life-income gifts:
Charitable Remainder Annuity Trust: An irrevocable trust that generates a fixed income stream for you or your beneficiaries, with the remainder of the donated assets eventually going to one or more nonprofit organizations you select.
Charitable Remainder Unitrust: An irrevocable trust that generates an income stream for you or your beneficiaries, with the remainder of the donated assets eventually going to one or more nonprofit organizations you select.
Pooled income fund: A charitable trust established and maintained by a qualified nonprofit organization, providing you and/or your beneficiaries with a potential lifetime income stream based on a prorated share of the income earned by the fund. Remaining assets are eventually distributed to the charitable beneficiaries you have recommended.
Charitable Gift Annuity: A contract with a nonprofit organization, in which you provide a gift and, in exchange, the nonprofit guarantees you income for life.
To learn more, please click on the title.