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Sunday, April 28, 2024
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Case Studies |
Bruce - The Generous IRA Donor
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Case:
Bruce retired several years ago, but he wanted to be active during his retirement years. So Bruce started volunteering with an organization that helps needy young children. Bruce devotes several hours a week to his volunteer work and receives great satisfaction by helping young children in need.
Question:
Since Bruce lives fairly moderately and has a good income from his retirement plan and investments, he is a very generous donor. In fact, Bruce gives away 50% of his income each year and lives on the balance. He feels that this is an opportunity for him to "give back" to society for the very good life he has been able to lead. But Bruce would like to do more. Is there a way for Bruce to help even more?
Solution:
The charity for needy children has a special project underway and would like to build a new youth activity center. Bruce especially sees the importance of this center in helping more children and would like to make an additional gift of $20,000 for this purpose. He checked with his CPA and discovered that the charity for needy children is a qualified public charity.
Bruce's CPA also explained that a tax-free IRA charitable rollover is now permitted. As a result, Bruce was able to contact his IRA custodian and have a gift of $20,000 sent to charity for needy children. The charity also included Bruce on a plaque that will be on the wall of the new building as one of the major supporters of the new center.
Bruce is very pleased with his gift. There was nothing included in his taxable income and he was able to deduct both his regular gifts plus make the additional $20,000 IRA gift.
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