Popular tax-smart gifts

Cynthia and I are now in the last 10K of our lives’ marathons and focusing on what little we can do to help places like Salisbury School keep the lights on (Annual Fund) and build its Endowment with a particular interest in Student Scholarship Aid. Every donation we make has a ‘multiplier effect’ calculation.

Traditional IRA requirements (for those over 70.5 yr.) require us to take a certain amount each year, Required Minimum Distributions (RMD’s) and pay income tax on that amount. Not only are we paying income tax on this IRA sum, but it may lift us into a higher income tax bracket, too. A Qualified Charitable Distribution (QCD) gift directly to Salisbury School qualifies as a required IRA distribution but with no income tax expense to the donor. If we are in the 25% income tax bracket, by using a QCD direct gift to Salisbury we are immediately increasing the real value of our gift by 33%. A $10,000 IRA RMD check sent to us requires our holding back $2,500 (25%) for IRS income taxes = a personal check of $7,500 gift to Salisbury. A direct QDC identified gift gives Salisbury the full $10,000 gift (a 33% increase over the $7,500 personal check from us) and does not raise our income taxes that gift year by $2,500. This is why we love gifting using the IRA QCD option.

For each school or college, we have set a personal donation goal and as able each year we use our Traditional IRA-RMD funds through QCD’s to fulfill these goals. Upon death we have provided in our Wills to finish fulfilling these goals, if needed.

For us supporting education is the most powerful ‘multiplier effect’ anywhere. That is where our annual IRA QCD’s go. We love the idea that we are helping lots of young people expand their horizons, rethink their priorities, and venture forth with new confidence. That’s what Salisbury School is trying to do. Great for each student, good for their communities and good for our country.”