IRS Updates Rules for Computing Planned Gift Deductions

On June 1, 2023, the IRS made public Treasury Decision 9974 (TD 9974). TD 9974 contains final regulations relating to the use of actuarial tables in valuing annuities, interests for life or a term of years in property, and remainder or reversionary interests in property. A change of immediate importance to gift planners, TD 9974 requires use of the 2010CM mortality table when computing the deduction for a gift annuity, charitable remainder trust, or other split-interest gift made on or after June 2, 2023.

When Your Donor Should Consider a QCD for a CGA . . . and When They Shouldn’t!

Since January 1, 2023, it has been possible for a donor to make a qualified charitable distribution (QCD) from an IRA of up to $50,000 to fund a gift annuity. This new giving opportunity has sparked a lot of interest among gift planners. Some have already helped donors complete this type of gift. Many limitations apply to the QCD for CGA arrangement in addition to the $50,000 maximum: the donor can make this type of gift in one year only and must be at least 70 ½ years old, only the donor and the donor’s spouse can be annuitants, the gift is not deductible, the donor cannot defer the annuity payments, and all annuity payments are fully taxable as ordinary income. On the positive side, the distribution from the IRA is not taxable and counts toward the donor’s required minimum distribution (RMD) for the year. Which raises the question: Under what circumstances, if any, does funding a gift annuity with a QCD make financial sense?

Breaking News - Legacy IRA Act Becomes Law

[Updated December 29, 2022] In the final hours of the 117th Congress, provisions of the Legacy IRA Act included in an omnibus spending bill (the Consolidated Appropriations Act, 2023 or H.R. 2617) passed the House and Senate and were signed into law by President Biden, creating a new charitable gift planning opportunity. Beginning in 2023, donors over age 70 ½ will be able to make a Qualified Charitable Distribution (QCD) in exchange for a charitable gift annuity (CGA) or to fund a charitable remainder annuity trust or charitable remainder unitrust. For practical purposes, it is unlikely donors will use this opportunity to fund a charitable remainder trust. However, a charitable gift annuity could be an appealing and viable option for some donors.

The Most Important Marketing Trend for 2020: Your Donor

As we approach the end of the year, it’s a great time to look ahead and anticipate the next big marketing trend for 2020. Technology continues to advance at a rapid pace, so of course, you might think next year’s big marketing trend would focus on new technology. You’d be wrong. While the use of technology in data-driven marketing will certainly continue to be important in 2020, your overarching focus should be on people. Specifically, spending time improving your donors’ digital experiences.