When you make a gift to Central Coast State Parks Association through your retirement plan assets, we can arrange a convenient way to avoid income tax and potential estate tax. You can take advantage of your retirement assets to create a long lasting benefit for you and your family, reduce federal taxes, and support Central Coast State Parks Association far into the future.
- Name the Central Coast State Parks as a beneficiary of your IRA, 401(k), or other qualified retirement plans.
- Pass the balance of your retirement assets to the Central Coast State Parks Association by contacting your plan administrator.
- Important! Tell the Central Coast State Parks Association about your intended gift. Your plan administrator is not obligated to notify us. So if you don’t tell us, we may not know.
70 ½ or older? Make a “Tax-Free” gift through your IRA qualified charitable distributions (also referred to as a Charitable IRA Rollover Gift)
Did you know the gift of a Qualified Charitable Distribution (QCD) benefits donors aged 70½ and up? The Qualified Charitable Distribution is an excellent way to show your support for Central Coast State Parks Association and receive tax benefits in return. As you plan your required minimum distributions (RMD) for this year, consider using your IRA account to make the most of your charitable giving. You receive a tax benefit even if you take the standard deduction! It’s important to consider your tax situation before deciding whether to make a charitable contribution from your IRA. Be sure to share this gift plan with your financial advisor. Here are the qualifications:
- You must be 70½ or older at the time of gift.
- Distributions must be made directly from a traditional IRA account by your IRA administrator to Central Coast State Parks Association.
- Gifts must be outright, meaning they go directly to Central Coast State Parks Association. Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities do not qualify.
- Gifts from 401k, 403b, SEP and other plans do not qualify. Ask your financial advisor if it would make sense for you to create a traditional IRA account so you can benefit from an IRA Qualified Charitable Distribution.
Tax Benefits
- IRA Qualified Charitable Distributions are excluded as gross income for federal income tax purposes on your IRS Form 1040.
- The gift counts toward your required minimum distribution for the year in which you made the gift.
- You could avoid a higher tax bracket that might otherwise result from adding an RMD to your income.
Questions & Answers
What’s the IRS rule?
The QCD allows individuals 70½ and older to make direct distributions up to $100,000 per year to 501(c)(3) charities without having to count the distributions as income for federal income tax purposes. No charitable deduction may be taken, but distributions will qualify for all or part of the IRA owner’s required minimum distributions.
Who qualifies?
Individuals 70½ or older at the time of the contribution (you have to wait until 6 months after your 70th birthday to make the transfer).
Who qualifies?
Individuals 70½ or older at the time of the contribution (you have to wait until 6 months after your 70th birthday to make the transfer).
How much can I distribute?
$100,000 per year. The distribution must be outright to charity.
From which accounts can I make transfers?
Distributions must come from your IRAs directly to Central Coast State Parks Association. If you wish to help us with a gift from another retirement asset such as a 401k, 403b, etc., you must first roll those funds into an IRA. Then you can direct the IRA administrator to distribute the funds from the IRA directly to Central Coast State Parks Association.
Can I use the QCD to fund life-income gifts (charitable gift annuities, charitable remainder trusts, or pooled income funds), donor advised funds or supporting organizations?
No, these are not eligible.
How will Central Coast State Parks Association count the gift?
We will give you full credit for the entire gift amount. You will also receive a letter, which states that the gift qualifies as a QCD to use for tax reporting purposes.
What are the tax implications for me?
- Federal — You do not recognize the distribution to Central Coast State Parks Association as income, provided it goes directly from the IRA administrator to us. Therefore, you are not entitled to an income tax charitable deduction for your gift.
- State — Each state has different laws, so you will need to consult with your own advisors. Some states have a state income tax and will include this distribution as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their income tax on the federal income or federal tax paid. Some states have no income tax at all.
Does this transfer qualify as my required minimum distribution?
Yes. Once you reach 70½, you are required to take required minimum distributions from your retirement plans each year according to a federal formula. QCDs count toward your minimum required distribution for the year in which you make the gift.
Can my spouse also make a Qualified Charitable Distribution?
Yes, every individual who is the owner of a traditional IRA can use the Qualified Charitable Distribution for up to $100,000 each year.
How do I know if a Qualified Charitable Distribution is right for me?
Share this information with your financial advisor. Our office can provide additional information and examples of this gift plan. Call us. We would be delighted to help.
What is the procedure to execute a QCD?
Please let your plan administrator know this gift must be sent prior to December 31 to qualify as a charitable distribution for the tax year. Make sure you contact us when you direct the distribution so we can look for the check from your IRA administrator.
For more information, please contact us. Important: Be sure to check with your financial advisor to determine whether this gift plan is right for you. This information is not meant as tax or legal advice.
John is 71 years old and wants to make a gift to Central Coast State Parks Association. He has $500,000 in his IRA and wants to gift $20,000. He can authorize the administrator of his IRA to distribute $20,000 to Central Coast State Parks Association. Because the IRA Qualified Charitable Distribution is excluded from income, John will not be eligible for a charitable income tax deduction — but he still receives tax savings. The $20,000 distributed to Central Coast State Parks Association will be counted toward his annual minimum required distribution and he will not pay income tax on the portion given to the organization.