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 the Symphony, 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 the Symphony 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 the Symphony.
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 (619) 237-1964 so that we can assist you through every
step of the process.
San Diego Symphony Foundation
1245 Seventh Ave
San Diego, CA 92101
(619) 237-1964
