A Gift from an IRA

With a gift from your IRA, you have a few options for making a powerful impact.

OPTION 1—a traditional qualified charitable deduction (QCD)

You may find this appealing if you would like to make an immediate gift that counts toward your required minimum distribution (RMD). It works like this:

  • If you are an IRA owner age 70½ or older, you can order a transfer from your IRA directly to Citizens & Scholars.
  • The gift does not qualify for an income tax deduction, but any amount up to the annual aggregate limit ($105,000 in 2024) is tax free.
  • The gift counts toward your RMD if one is due (generally, beginning at age 73).
  • Your gift has an immediate impact on our work, and you can make this gift every year if you choose.

Note that contributions to an IRA after age 70½ reduce the amount eligible for a QCD.

Calculate your RMD

OPTION 2—a new qualified charitable deduction

This option lets you make a gift that counts toward your RMD and also creates a new income stream for retirement. It works like this:

  • If you are an IRA owner age 70½ or older, you can direct a one-time transfer from your IRA to create a new charitable remainder trust (CRT).
  • The gift does not qualify for an income tax deduction, but any amount up to the limit ($53,000 in 2024) is tax free.
  • The gift counts toward your RMD if one is due (generally, beginning at age 73).
  • The minimum amount to fund a charitable remainder trust is $100,000. However, spouses may contribute $53,000 each from their own IRAs into a single CRT.
  • Income payments may only go to the IRA owner and the owner’s spouse and are taxed at ordinary income tax rates.
  • This is not an annual gift—you may only use this option once.

Click here to read more about charitable remainder trusts. Keep in mind that some rules and requirements differ if you fund the CRT from your IRA.

OPTION 3—a charitable beneficiary designation

You may prefer this option if you want to make a comfortable future gift that costs you nothing today. It works like this:

  • At any age, ask your IRA custodian for a change-of-beneficiary form.
  • You can name Citizens & Scholars as the sole beneficiary or percentage beneficiary.
  • You pay nothing now and retain the right to change your gift if your needs and goals change.
  • At your death, we will receive the designated assets from your IRA.

Why leave retirement assets to charity?

Retirement account assets left to heirs are highly taxed—once in the estate and again as income to the beneficiaries. Stocks, bonds, mutual funds, and real estate are not subject to income tax when they transfer to heirs (although they will eventually be taxed when they are sold). By using IRA assets to make gifts and leaving other assets to family members, you minimize the income tax burden on your heirs, leaving more to your intended beneficiaries while meeting your charitable goals.

Evaluate the fit.

A gift from your IRA may be a particularly good option to consider if you:

  • Are an IRA owner age 70½ or older
  • Want to avoid paying federal income tax on your required minimum distribution
  • Want to establish a source of fixed income payments to supplement other income streams in retirement
  • Are looking for a flexible, easy way to make a significant future gift

See how it works.

Pat, age 75, is required to take a taxable IRA distribution of $15,000 this year. Pat wants to support our work and decides to make a qualified charitable distribution, transferring $15,000 directly from the IRA to Citizens & Scholars. The transfer counts toward Pat’s RMD, satisfying the distribution requirement, but no federal income tax is due on the distribution. The full amount of the transfer supports our mission—nothing is lost to taxes!

Gift From Your IRA - QCD_Traditional

Consider your timing.

The traditional QCD can usually be accomplished if you begin the process in early December. The new QCD option may require a bit more time to set up the CRT. A beneficiary designation is quick and easy to make at any time.

We can help.

We can provide you with more information about any of these options for using your IRA assets to make a gift. You will work directly with your IRA custodian to accomplish these gifts, but please let us know so we can provide the necessary substantiation for your QCD gifts. If you make a beneficiary designation, we would like the opportunity to thank you.

Contact us today!

We appreciate you including us in your planning.

Making Citizens & Scholars a beneficiary of your IRA qualifies you for membership in the Fellows Legacy Society. This is our way to thank you for supporting our future as you plan for yours. Read more about the Fellows Legacy Society here.