If you are age 70 ½ or older: New legislation allows donors aged 70 ½ or older to direct distributions of up to $100,000 from their IRAs and ROTH IRAs to Maryville without having to pay income tax on the withdrawal. Under previous laws, donors would incur a tax penalty if they used funds from their IRAs to fund a charitable gift. Charitable distributions from their IRAs can be counted towards the donor’s minimum distribution for the year. Charitable distributions must be made outright to Maryville, and cannot be used to fund a charitable remainder trust, charitable gift annuity or be distributed to Maryville through a donor advised fund or private foundation.
If you are younger than 70 ½: Donors who are younger than 70 ½ are not covered by the legislation but they can make gifts using funds from their IRAs and ROTH IRAs. To do so, they must first make a withdrawal from their IRA, and then donate the proceeds to Maryville. The withdrawal will be included in their taxable income for the year, but they will also be eligible for an offsetting charitable deduction for their contribution. These donors can use their retirement plan to fund a gift plan that will provide them with lifetime income, such as a charitable remainder trust or charitable gift annuity.
How it Works
1. Donors direct a lifetime distribution from their IRAs or ROTH IRAs to Maryville Academy. Donors can make gifts of up to $100,000 in 2006 and $100,000 in 2007.
2. Your retirement plan makes a payment to Maryville.
3. Under new legislation, donors aged 70 ½ or older do not pay income tax on the withdrawal. (Donors younger than 70 ½ can make gifts from their IRAs or ROTH IRAs too! See Tell Me More for details.)
How You Benefit
Donor age 70 ½
Transfer from IRA $100,000
Contribution to Maryville $100,000
Income tax on withdrawal $0
Charitable deduction $0
Tax cost $0
Donor younger than 70 ½
Withdrawal from IRA $100,000
Contribution to Maryville $100,000
Income tax on withdrawal (35% rate) $35,000
Charitable deduction (35% rate) $35,000
Net tax cost $0
Is This Gift Right For You?
If you are 70 ½ or older and have an IRA or a ROTH IRA and you want to make a significant gift to support the work of Maryville, this gift may be right for you. This gift is ideal for those taking mandatory minimum withdrawals who do not need any additional income or individuals who want to give more than the maximum deductible amount. If you are younger than 70 ½ and your tax liability for the year will be low, and you want to make a significant gift to support the work of Maryville, you may benefit by making your gift to Maryville from your IRA. For a customized projection, please contact us.
How to Make a Gift from your IRA
Maryville can provide you with easy instructions on how to make a gift from your IRA. Because you will need to work with your plan administrator to complete your gift, we recommend getting started as soon as possible in order to complete your gift by year-end.
For more information on making a current or planned gift to Maryville, please contact us:
847.294.1982