Gifting of IRA annuities
Can you gift money in a IRA annuity to a charitable gift annuity without surrendering it and paying the tax? And, can you 1035 a commercial annuity to a charitable gift annuity without surrendering it and paying the tax?
Can you gift money in a IRA annuity to a charitable gift annuity without surrendering it and paying the tax? And, can you 1035 a commercial annuity to a charitable gift annuity without surrendering it and paying the tax?
Permalink Submitted by Joseph Arsenault on Thu, 2010-06-17 04:54
You can only gift money from an IRA to a qualifying charity (or charitable gift annuity) if you are over 70 1/2 and you stay under 100k for your lifetime. This provision actually expired last year but is in the extenders bill which was passed by the House and has bounced around because of controversial revenue provisions (like carried interest rules and the S Corp tax). As of right now your answer is no, by the end of the year it could be yes in some situations. As far as the “surrender”, that completely depends on the annuity and its liquidity and contract length.
For the 1035 question, you cant transfer ownership to an owner other than your spouse (which is what your suggesting), or the built in gain on the annuity will be taxable to the first owner. Your better off leaving the charity as the beneficiary since it is an IRD and the charity is presumed to be tax exempt.
Permalink Submitted by Rick Tenison on Mon, 2012-05-21 19:19
Can you gift an annuity with enbedded gains to a charity without paying taxes?
Permalink Submitted by Alan Spross on Mon, 2012-05-21 21:10
This thread was discussing qualified charitable distributions (QCD) and those only apply to IRA accounts for those that have reached 70.5. Further, the QCD has not yet been extended by Congress for 2012, so thus far in 2012 it does not exist for IRA owners or IRA beneficiaries.
However, even in prior years there was no provision for making such direct gifts from non qualified annuities. A NQ annuity owner would have to report a taxable distribution from the annuity and then make a gift subject to Sch A itemized deductions. Even if the owner can itemize, using Sch A is not as tax efficient in many cases because the annuity earnings must be reported in AGI first.