In late December 2022, President Biden signed into law H.R. 2617, the Consolidated Appropriations Act, 2023. The Act includes provisions of the so-called “Secure 2.0 legislation” which created new possibilities for funding life income gifts to charity. These provisions are effective as of January 1, 2023. The owner of a traditional IRA may now make a distribution of up to $50,000 from the IRA directly to a new charitable remainder trust (CRT) or charitable gift annuity (CGA). Following are a few highlights of the legislation:
- Individuals age 70 1/2 or older who have a traditional IRA
- One-time election in one calendar year
- Up to $50,000, ($100,000 for a couple with separate IRAs) to fund a new CRT or CGA
- No charitable deduction and distributions are taxed as ordinary income
- Tax-free withdrawal that counts towards required minimum distribution (RMD) from IRA
- QCD must be the only asset given, no combination of funding assets
Charitable Remainder Trust
- No additional assets can be contributed and no additions to existing CRTs
- Trusts must run for life, no term of years
- Life income beneficiary must be donor and/or donor’s spouse
Charitable Gift Annuity
- Immediate payment only
- Required minimum payout of 5%
- Can be used to establish one or more CGAs in one year
- CGAs can be established at one or more 501(c)3s
Please contact us to learn more about funding a life income gift with a Qualified Charitable Distribution.
A small gift will help with rent, utilities, gasoline, clothing, medical, dental, school supplies, toys,
wonderful accomplishments will come …their future begins with you , today.
Thank you
Ronald William Sheldon
President
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