Gifts of Retirement Plans
Gift Example
The example below is based on a factor that changes monthly. Request for a personal gift illustration based on the latest rates.
How can you give more to your heirs with less? For the sake of simplicity, let's assume you have $300,000 in an IRA* and appreciated stock worth $250,000. Assuming you are in the 45 percent estate tax bracket, you can see that your heirs actually benefit more from the lower valued gift of stock.
| |
IRA to Charity |
Stock to Heirs |
IRA to Heirs |
| Value of IRA |
$300,000 |
$250,000 |
$300,000 |
| Estate tax (45%) |
$0 |
$112,500 |
$135,000 |
| Transfer to Heir |
|
$137,500 |
$165,000 |
| Less income tax (33%) |
|
$0 |
$54,450 |
| Remainder to charity/heirs |
$300,000 |
$137,500 |
$110,550 |
| Total Tax |
$0 |
45% |
63% |
*While Woodland Healthcare Foundation cannot receive IRA gifts, its staff will be happy to help facilitate your gift to the Sisters of Mercy ministry you choose.
What if I'm not affected by the estate tax?
The income your heirs receive from your IRA is called "Income in Respect of Decedent (IRD)." IRD is taxable upon transfer and at the donor's highest tax rate. However, the gift of stock is taxable when the heirs sell the shares. Then, the gain that occurred from the date of transfer is taxable – typically at the 15 percent tax rate.
« Back to Gifts of Retirement Plans