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?

Pitfalls to Avoid When You’re New to Your Planned Giving Office

If you’re new to your role in planned giving, either because you’re covering for someone on leave, you’ve had planned giving added to your major gift responsibilities, or you’re new to the field - welcome aboard! PG Calc is invested in your success, and we’ve gathered a list of planned giving pitfalls that could get you in hot water with donors, auditors, or the IRS that we hope to help you avoid.

BDQ #2: I Don’t Have an RMD, So Why Would I Want a QCD?

The BDQ (Big Dumb Question) We’ve all been there: at some point during a presentation someone says, “This may be a dumb question, but…” and the presenter (hopefully in a gracious tone of voice) says, “There’s no such thing as a dumb question,” before providing the obvious answer. But sometimes, just to yourself, you have to admit you were wondering about the same thing. That’s the idea behind this occasional series we’re calling “The Big Dumb Question” (or BDQ). Our aim is to provide easy to understand answers to basic gift planning questions – the kinds of questions you may be reluctant to ask. We’ve got a list of topics in mind (see below). I Don’t Have an RMD, So Why Would I Want a QCD? “I prefer the large confusion to the small certainty,” said poet John Ciardi. That’s a healthy approach when thinking about Qualified Charitable Distributions (QCD) and Required Minimum Distributions (RMD). There is a large confusing array of initials – RMDs and QCDs, QRPs and IRAs, to name a...