Is it Better to Give or Receive? Why Not Both?

Philosophers have wrestled with the question, “Is it better to give or receive?” Thanks to a new tax law, you may not need to choose. Perhaps your answer can be an emphatic, “Both!” The new law, called the “Legacy IRA Act,” allows donors over age 70½ to make a charitable contribution to the Capuchins friars from their IRA accounts and receive a lifetime of payments in return. This new gift opportunity combines a Charitable Gift Annuity and a Qualified Charitable Distribution from an IRA.

Here’s how it works.

A Charitable Gift Annuity is a simple contract between you and the Capuchins promising to pay you a fixed amount of money each year for life. The amount paid to you will depend upon your age at the time of your gift and does not change for the rest of your lifetime.

A Qualified Charitable Distribution is a charitable contribution from your IRA to the Capuchins. You can make a Qualified Charitable Distribution if you are at least age 70½. Unlike most distributions from your retirement account, you pay no income tax on a Qualified Charitable Distribution.

The new law allows donors to make a Qualified Charitable Distribution in exchange for a Charitable Gift Annuity. There are some rules and limitations: you can do this only once during your lifetime and there is a limit of $53,000 (for contributions completed in 2024; the limit is adjusted for inflation each year). In addition, the entire payment you receive from your Charitable Gift Annuity will be subject to income tax and there is no income tax deduction for your contribution (although there is no tax on your Qualified Charitable Distribution either).

Please contact Kristi Hassouna in our development office at 313.939.2002 to learn the details. We would be happy to work with you and your advisors to help determine how a Qualified Charitable Distribution for a Charitable Gift Annuity could allow you to both give and receive.