IRA Planned Giving

Consider a gift to the Saginaw Art Museum through your IRA

The Qualified Charitable Distribution Provision allows individuals aged 70 ½ or older the ability to distribute directly to a qualified charity from their Individual Retirement Account.

The American Taxpayer Relief Act of 2012 (ATRA) extended again the qualified charitable distribution (QCD) provisions for 2013.  A QCD is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is 70 ½ or over that is paid directly from the IRA to a qualified charity.  An IRA owner can exclude from gross income up to $100,000 of a QCD made for a year, and a QCD can be used to satisfy any IRA required minimum distributions (RMDS) for the year.  Also, the amount of a QCD excluded from gross income is not taken into account in determining any deduction for charitable contributions.

This provision may be especially attractive for retirees who don’t need all the income from their IRA to meet current living expenses.  By donating the money to the Saginaw Art Museum, you can TAKE PART IN THE ART, knowing that you are contributing to a worthy cause while effectively lowering your tax bill.  Below are some considerations:

  •         You must be at least 70 ½
  •         Contributions must be made only to 170(b)(1)(A) organizations, which are “public” (50%) foundations and 501(c)(3) charities.  This excludes donor-advised funds, supporting organizations and private (30%) foundations (except for conduit foundations and private operating foundations).  This is clearly something you will need to review with your accountant before sending any checks.
  •         This only applies to contributions that would otherwise completely qualify for the charitable deduction.  This excludes gift annuities, charitable remainder trusts, etc.  The idea is that there can be no benefit to you from the museum, other than our appreciation.
  •         The contribution must otherwise have been considered taxable income.
  •         Payment must be made directly from your IRA trustee to the Saginaw Art Museum (however you can deliver the check yourself).  If the check is payable to you, then it becomes taxable income, and you will be left declaring the income and taking a normal charitable deduction.
  •         You can take the distribution from any IRA except a SEP or Simple IRA that is still active (receiving contributions).  You cannot take it from any employer sponsored plan like a 401k or 403b.
  •         You cannot also take a charitable deduction for the QDC.
  •         The QDC cannot be a split interest gift.

For more information on this and other ways to support the Saginaw Art Museum through planned giving please contact Mike Kolleth, (989)754-2491