Gifts from Retirement Plans
You may be surprised to learn that the IRS will impose income tax on the remaining balance in your retirement plan, such as a 401(k), IRA, or Keogh, if you bequeath it to a beneficiary other than your spouse.
This tax is in addition to the estate tax that will be imposed on the account. For estates fully subject to the estate tax, the result can be that 70 percent of the value of your retirement plan will be consumed in taxes before your child, relative or friend receives it.
There is a sensible charitable alternative: name Freedom from Hunger as the beneficiary of your retirement plan, and use other assets not subject to income tax to make gifts to your heirs. No taxes are subtracted from amounts left to Freeedom from Hunger.
If you are age 70½ or older, new legislation now allows you to make cash gifts totaling up to $100,000 a year from your traditional or Roth IRA to qualified charities without incurring income tax on the withdrawal. This is good news for people who want to make a charitable gift during their lifetime from their retirement assets, but have been discouraged from doing so because of the income tax penalty. The provision is effective for tax years 2006 and 2007 only, so you must act by December 31 to take full advantage. Contact us for more information.
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To learn more about gifts from retirement plans, Email us, complete the Information Request Form, or call us at so that we can assist you.
Freedom from Hunger
Attention: Chris Dodson
1644 DaVinci Court
Davis, CA 95618
(530) 758-6200 ext. 1042
(800) 708-2555
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