New Incentives for Charitable Giving

IRA assets can now fund life income gifts! While there are limits on these gift opportunities, it is likely the start of something very big for OZ.

Here are the basic facts:

  • You can make this once-in-a-lifetime gift election in only one tax year (hopefully with success and more lobbying, this may change).
  • The aggregate limit of IRA funded life income gifts for 2024 is $53,000.
  • Since these count as QCDs (Qualified Charitable Distributions), the entire amount contributed towards one of these IRA funded life income gifts will also count towards your RMDs (Required Minimum Distributions). Starting in 2023, the required beginning date for taking distributions from an IRA is age 73.
  • As with the outright QCD, you do not get an income tax charitable deduction. But the entire distribution is excluded from income, much like an "above the line" deduction, benefiting itemizers and nonitemizers alike.
  • Both regular QCD gifts and QCD gifts for split interest gifts up to $50,000 will be adjusted for inflation each year (meaning the $100,000 direct QCD limit and the $50,000 life income limit will adjust upwards for inflation going forward). For calendar year 2024, the adjusted amounts are $105,000 and $53,000.

Why is this so important?

Firstly, IRAs in particular are a huge financial asset class of the baby-boomers - in the $ Trillions - and already represent a phenomenal opportunity for legacy gifts. Additionally, you can now lock in guaranteed income for life at favorable rates while also making a significant legacy commitment.

As this law hopefully expands, life income gift programs in particular will become more and more important to our organization's future.

Planned Giving Welcome Bequests