IRA, A Tax-Free Gift

Did you know? Americans over the age of 70.5 can distribute up to $100,000 in a calendar year from an IRA to the Ransom Memorial Hospital Charitable Association (RMHCA), tax free? Gifting a retirement plan is a tax-efficient and simple way of including the RMHCA in your estate plan. Most retirement plans (other than Roth IRA’s) are subject to income taxes as well as estate taxes, if left to an individual beneficiary. However, a charity named as a beneficiary does not pay income or estate taxes on the distribution, thus, the full value of what is distributed can be used by the RMHCA in supporting a program you designate.

A distribution to charity can be a significant benefit for IRA owners who are required to make minimum distributions, which are included in their gross income for income tax purposes. If an IRA owner directs their plan administrator to distribute an amount up to $100,000 to charity, the distribution counts towards the owner’s minimum required distribution, but is not included in his or her income for income tax purposes. Consult your tax advisor for more information.