Assets held in a qualified retirement plan have never been subject to income-tax. Heirs will have to pay income-tax on the proceeds. Under the current law, a gift of qualified retirement assets, up to $100,000 to a charity during life is a taxable gift. Gifts to charitable organizations at death can reduce tax burden on family beneficiaries.

Changing the beneficiary of your retirement account can be done by contacting your bank, investment advisor or plan administrator to obtain the right form.

IRA Charitable Distribution

Annual withdrawals from traditional retirement accounts are required after age 72, and the penalty for skipping a required minimum distribution is 50 percent of the amount that should have been withdrawn. You can avoid income tax on your required withdrawal by donating your money directly to a qualifying charity. You can make an IRA charitable rollover gift through a direct transfer from your IRA to ECU Health Foundation.

*The tax-free transfer must be paid from the IRA custodian directly to the charity, not to you and then the charity.

Tax Benefits

  • Those who inherit your retirement assets are subject to taxes up to 37% of the value. The only exceptions are distributions from a Roth IRA, and distributions on nondeductible contributions made to a conventional IRA.
  • The distribution from your IRA does not count as taxable income.
  • You may receive tax benefits even if you don't itemize.

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