• "I am deeply grateful to the Masonic Village's employees, and will never be able to express my gratitude to all of them." — Catherine L.

  • "I liked my Masonic Charity Foundation charitable gift annuity so much, I opened three more. Why? I might be old-fashioned, but the scriptures have taught me the virtue of looking out for others. Knowing that the funds left in my gift annuities will care for the Masonic Village residents makes me feel wonderful." — Dorothy B.

  • "I am writing to tell you, from the bottom of my heart, just how wonderful the last two years of my mother's life were, thanks to all of you at the Masonic Village at Burlington." — Carol O.

  • "It's not just the Masonic Village's beautiful facilities and the many services that are offered to the residents – most of all, it's the employees. They are personally dedicated it seems to each and every individual here." — Catherine L.

  • "We are equally grateful for the 'loving arms of hospice' that were wrapped around our family in our hour of need." — M.W.

  • "When we decided to come to the Masonic Village at Burlington, we knew it was going to be a very big change in our lives. When we came here, we were very pleased that it was not difficult. We would recommend the Masonic Village highly to a friend." — Joseph and Bertha B.

  • "There is simply no way to express the depth of gratitude I feel for the Masonic Village at Burlington – thank you!" — Jim C.

  • "We know first-hand how very special Acacia Hospice's caregivers are, and we thank every single one of them from the bottom of our hearts." — J.M.

  • "It is with a grateful heart that we extend to you our deepest gratitude for the loving care that Acacia Hospice afforded our beloved Aunt." — M.W.

  • "It has been a source of tremendous relief that my parents were in such caring and professional hands during the final years of their lives." — Jim C.

  • "It takes a very special person to do the job Acacia Hospice's caregivers do every day. We would like you to know we think you have an incredible group of 'Angels.'" — J.M

Text Resize
Print
Email
Subsribe to RSS Feed

Tuesday January 21, 2020

Case of the Week

Gifts from IRAs, Part 3

Case:

Quentin Charles Douglas was the firstborn child in a large family. Throughout his childhood, Quentin’s parents worked hard to put food on the table for their children. They also instilled in Quentin the value of hard work and saving money. Quentin took those lessons to heart, putting forth his best effort in school, finding a rewarding job and putting away as much in savings as he could. For many years, Quentin worked for a company that offered a 401(k) plan. During those years, he put as much into his 401(k) as he could afford so that he could maximize the benefit of his employer’s matching contributions. Eventually, Quentin moved on to other employment and made a tax-free rollover of his 401(k) into an IRA. As he approached retirement, Quentin continued to contribute to his retirement savings by maxing out his IRA contributions each year.

With his lifelong penchant for saving money and some savvy investing, Quentin was able to retire comfortably at age 65. Now in his early 70s, Quentin understands that he will soon be taking required minimum distributions (RMDs) from his IRA. Given his lifetime savings, investment income and social security distributions, Quentin does not feel he needs the additional income that the IRA distributions will provide – especially with the increased taxes tied to that income.

Question:

Having spoken with his advisor about making an IRA charitable rollover gift to charity, Quentin is excited to move forward. Quentin is preparing to call his IRA custodian to request a distribution in his name. He will then cash the check and send the proceeds to charity. Before he does so, however, he gives his advisor a call to make sure he is following the proper steps.

Solution:

Quentin’s advisor warns him not to request a check made out in his name. The IRA distribution must be a direct distribution from the IRA custodian to charity. If Quentin receives the check, cashes it and then sends the distributed amount to a qualified charity, his contribution will not qualify as an IRA charitable rollover.

Instead, the advisor explains, Quentin may send a letter to the IRA custodian explaining that he wishes to make a qualified charitable distribution (QCD) from his IRA to a public charity. In the letter, Quentin should direct the custodian to issue a check in the name of the charity and send the check directly to the charity. The IRA custodian will often respond by mailing the required form to the IRA owner to complete the QCD.

Quentin follows his advisor’s instructions and sends a letter directing his IRA custodian to make a distribution to his favorite charity in the amount of his RMD for the year. He is glad that he reached out to his advisor for help, knowing that he has narrowly avoided taking additional income for the year.

Published January 17, 2020
Print
Email
Subsribe to RSS Feed

Previous Articles

Gifts from IRAs, Part 2

Gifts from IRAs, Part 1

Lucky Lucy Lindstrom's Flood Recovery Plan

Lucky Lucy's Foundation Goes Public

Lucky Lucy Pays Tax on "Northern Long Shot" Foundation Income

scriptsknown