Question: For a donor 70½ or older, is a QCD the best way to fund a gift annuity?
Answer: In certain circumstances. Your donor may find, however, that it is more advantageous to use cash or appreciated securities because they:
- Will receive a charitable income tax deduction if they itemize.
- Avoid some capital gains, with the rest taxed over their life expectancy.
- Receive partially tax-free payments for their life expectancy.
- Can include other income beneficiaries, like a spouse or parent.
- Have the option to begin receiving payments at a later date, such as retirement.
- Aren’t subject to the $50,000 gift limit.
The “Philanthropy Puzzler” features gift questions fundraisers may encounter in the field, followed by solutions from our panel of experts. If you would like to send us your own “puzzler,” please email us at info@SHARPEnet.com with “Philanthropy Puzzler” in the subject line.