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The first example illustrates an outright gift from an IRA by a donor over age 70½.
The second example illustrates the costs and benefits of a withdrawal from an IRA by a donor younger than 70½.
Example 1
You are 75 years old and your adjusted gross income will total $200,000 this year. Earlier in the year you contributed $100,000 to The Nature Conservancy, so you have reached the limit (50% of adjusted gross income) on charitable gifts you can deduct this year.
You want to provide additional support for a The Nature Conservancy program, so you direct a $100,000 payment from your IRA to us.
| Here is a summary of
the costs/benefits: |
| Donor |
Individual,
age 75 |
| Transfer
from IRA |
$100,000 |
| Contribution |
$100,000 |
| Income tax on
withdrawal |
$0 |
| Charitable deduction
for withdrawal |
$0 |
Example 2
You are 65 years old. You withdraw $100,000 from an IRA
and contribute it to The Nature Conservancy.
| Here is a summary of
the costs/benefits: |
| Donor |
Individual,
age 65 |
| Withdrawal
from IRA |
$100,000 |
| Contribution |
$100,000 |
| Charitable deduction |
$100,000 |
| Deduction tax
savings @ 35% |
$35,000 |
| Tax
on IRA withdrawal @ 35% |
$35,000 |
| Net
tax cost of gift |
$0 |
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