The IRA Qualified Charitable Distribution...A Tax-Savvy Way to Support Willamette University

If you are 70½ years old or older, you can take advantage of a simple way to benefit Willamette University — and receive tax benefits in return — by making your gift to Willamette through your IRA. You may give up to $100,000 annually from your IRA directly to a qualified charity such as Willamette without having to pay income taxes on the money through what's called a charitable rollover gift, or "Qualified charitable distribution (QCD)".

Frequently Asked Questions

Q. Why should I make my gift to Willamette from my IRA?
A. You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.

Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to be 70½ on the date you make the gift.

Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. A QCD can be made only from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to Willamette. Please contact your plan administrator to determine whether or not you can make a QCD from your retirement account.

Q. Can my gift be use to satisfy my required minimum distribution (RMD) under the law?
A. If you have not yet taken your required minimum distribution for the year, the IRA charitable rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.

Q. Do I need to give my entire RMD to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your RMD is more than $100,000, you can transfer a portion of it to fund a charitable gift.

Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of $100,000. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.

Q. My spouse and I would like to give more than $100,000. How can we do that?
A. If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA, for a total annual household gift of up to $200,000.

Q. How do I make a gift through my IRA to Willamette?
A. First, we recommend you talk with your tax preparer or financial advisor to ensure that your gift to Willamette is made in the way that is most advantageous to you from a tax-perspective. Then, you will need to work with your IRA plan administrator to ensure that your gift is transferred properly to Willamette in order to qualify as a QCD. Finally, please contact the Office of Gift Planning at Willamette University to alert us that your gift is coming! We want to be sure to recognize you for your generous support of our students, and will issue a special tax receipt for you to provide to your tax preparer.

As always, please do not hesitate to contact the Willamette University Office of Gift Planning if you have any questions about your gift.

Cathy McCann Gaskin JD'02
Associate Director of Gift Planning
(503) 370-6492
cmccann@willamette.edu

A charitable bequest is one or two sentences in your will or living trust that leave to Willamette University a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Willamette University, a nonprofit corporation currently located at 900 State Street, Salem, OR 97301, or its successor thereto, ______________ [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Willamette or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Willamette as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Willamette as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Willamette where you agree to make a gift to Willamette and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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