Endowment
We would like to set up an endowment at a college. Can we start it with money taken from an IRA or a 401(k), and if so, are we taxed on that money? We do not yet have to take mandatory distributions yet. Thanks.
We would like to set up an endowment at a college. Can we start it with money taken from an IRA or a 401(k), and if so, are we taxed on that money? We do not yet have to take mandatory distributions yet. Thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2014-08-22 17:56
Yes, you must pay the taxes for 401k or IRA distributions. However, if the money is donated in a form that is deductible as a charitable contribution, you will get a deduction that would offset the taxable distribution. But the offset is only complete if you can itemize deductions in an amount that fully exceeds your standard deduction by the amount of the distribution, and for many that is not likely.