• Contributions to IRAs are not taxed until you begin withdrawals or retire.
• IRA’s are taxed at a higher rate than other financial instruments.
• Required Minimum Distributions (RMD) on your IRA are required by law at age 70-1/2.
• The IRA Charitable Rollover provides a tax offset instead of paying taxes on RMD.
• Gifts may be any amount not to exceed $100,000 per year.

How it works: Direct a gift to the NBCC, but do not take the distribution yourself. You will pay no taxes on that gifted amount, but there is no charitable deduction for that gift.

• Real estate may be the most highly appreciated asset you own, which means significant capital gains taxes if you sell your real estate. Donating real estate to the NBCC may help you eliminate the capital gains tax you would incur if you sold the real estate yourself and donated the proceeds.
• Stocks, bonds and mutual funds, donated directly to the NBCC, provide a tax deduction for the full fair market value.

How it works: Assigning stocks, bonds, and mutual funds to the NBCC eliminates the capital gains taxes you would incur if you sold your securities and donated the proceeds, and the NBCC receives the securities at the full market value.

Anthony and Marie wanted to make sure their children were remembered in their estate, but at 75 years of age, they had to take distributions from their IRAs, which caused a significant tax burden for the couple. After they consulted their tax adviser, they found a way to provide funding to the NBCC and reduce their tax burden. See the example below for an explanation of how this was done:

2020 Tax Year – Filing Jointly at Age 75
BEFORE CONSULTING A FINANCIAL ADVISOR

AGI Adjusted Gross Income: $125,000
RMD Required Minimum Distributions from IRAs: $60,000
Planned Charitable Contributions: $5,000
Federal Taxable Income (AGI minus standard deduction, plus additional standard deduction of $1,300 each for being over 65): $98,400
Federal Tax Owed: $13,527

2020 Tax Year – Filing Jointly at Age 75
AFTER CONSULTING A FINANCIAL ADVISOR

AGI Adjusted Gross Income: $125,000
RMD Required Minimum Distributions from IRAs: $60,000
Planned Charitable Contributions: $5,000
Federal Taxable Income (AGI minus standard deduction, plus additional standard deduction of $1,300 each for being over 65) MINUS THE QUALIFIED CHARITABLE DISTRIBUTION (QCD) OF $5,000: $93,400
Federal Tax Owed: $12,427
Tax Savings: $1,100