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Charitable IRA Portfolio

Charitable IRA Portfolio. About the law. IRAs available for tax-free lifetime gifts Donors must be 70½ Up to $100,000 per IRA holder per year Provision is now permanent Can satisfy the required minimum distribution requirement (RMD). DONOR ADVISED FUND. Targeted opportunity.

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Charitable IRA Portfolio

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  1. Charitable IRA Portfolio

  2. About the law • IRAs available for tax-free lifetime gifts • Donors must be 70½ • Up to $100,000 per IRA holder per year • Provision is now permanent • Can satisfy the required minimum distribution requirement (RMD)

  3. DONOR ADVISED FUND Targeted opportunity HNW with substantial retirement savings Funds: • Unrestricted • Field of Interest • Designated • Scholarships Donors may want to talk their estate and tax advisors

  4. Who stands to benefit most? Ten questions to help donors decide

  5. Ten questions to help donors decide 1. Are you planning to leave a charitable legacy through your estate plan?

  6. Ten questions to help donors decide 2. Have you designated the community foundation or your favorite cause as the beneficiary of retirement assets?

  7. Ten questions to help donors decide 3. Have your retirement savings and investment growth exceeded your expectations?

  8. Ten questions to help donors decide 4. Are your itemized deductions reduced by 3% because of the reduction on itemized deductions for higher income individuals? For example: Amarried couple filing jointly has $500,000 in adjusted gross income (AGI) and because their AGI exceeds the $305,050 threshold, the 3 percent reduction applies to this couple’s itemized deductions. AGI $500,000 Excess of couple’s AGI over $305,050 = $194,950 3% reduction x 3% _______________ Reduction of itemized deductions $5,848.50

  9. Ten questions to help donors decide 5. Do you take the standard deduction on your tax return and make annual gifts to your favorite charities? For example: the standard deduction for a married couple was $12,600 in 2015; if donors have no mortgage and low state/property taxes, they may not itemize and deduct charitable contributions—the new law allows for charitable contributions from IRAs to be excluded from income which is a special advantage for non-itemizers.

  10. Ten questions to help donors decide 6. Do you take minimum distributions from your IRA but have adequate alternative sources of income? For example: By age 70 ½, individuals must start to withdraw funds from their IRAs based on an IRS schedule, a 75 year old with $1,000,000 in IRAs must distribute at least $44,000.

  11. Ten questions to help donors decide 7. If you take greater distributions from your retirement plans, does doing so affect the amount of Social Security benefits that are taxed? For example: provisional income < $32,000, no tax on SS;$32,000 to $44,000, 50% of SS is taxable; greater than $44,000, 85% of SS is taxable.

  12. Ten questions to help donors decide 8. Is there a special cause that you care about?

  13. Ten questions to help donors decide 9. Would you like to benefit your community with a permanent funding stream?

  14. Ten questions to help donors decide 10. Do you want to know your charitable gift will make the greatest impact?

  15. Who stands to benefit most? High-income earners Generous donors Non-itemizers Financially comfortable

  16. Charitable IRA Portfolio Marketing objectives by audience

  17. Overview

  18. Sharing the Charitable IRA Portfoliowith your board and staff

  19. Targeting donors • At or about age 70 • High net worth • Donors who know the community foundation • Goal: a gift of up to $100,000

  20. Gift of a Lifetime

  21. Targeting professional advisors

  22. Estate planners • Knowledge of pending bequests • Interest in lowering estate tax • “Taxes or Charity” • Gift of a lifetime

  23. Certified public accountants • Extended tax law to share with clients • Year-end planning • More than running the numbers • Talk to community-involved CPAs

  24. Bankers/IRA administrators • Informs retail staff of IRA opportunity • Provides letter to notify charity • Confirms donors’ intent • Helps donor designate a fund or cause

  25. Nonprofit organizations • Build endowed funds • Donor named fund • Agency funds for many smaller gifts • Add to existing funds

  26. Groups with older Americans • Donor events • Rotary • Retirement communities

  27. General public • Develop a kit • Customize a releases with local stories • Connect with local media • Use talking points and web copy to answer questions

  28. Customizing your tools • www.cof.org • Customize yourself—Word, PowerPoint • Use PDFs • Use copy in your own materials

  29. Community Foundations Uniquely qualified to turn donors’IRAs into the “Gift of a Lifetime”

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