You can empower individuals with intellectual disabilities to achieve their full potential, not just in sports, but in life and in society.
And what’s more, you may receive tax benefits for these generous gifts.
Retirement plan gifts are an increasingly popular gift option for many Special Olympics supporters. Because retirement plans are taxed differently than most assets, they may become a tax liability.
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Transferring funds from an IRA to Special Olympics is an effective way to create a legacy of acceptance and inclusion.
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It’s not uncommon for people to have a life insurance policy that has outlasted its original purpose. If you do, you can use it (or a percentage of it) to reduce your taxes and create a gift for Special Olympics that demonstrates your commitment for a better world by fostering the acceptance and inclusion of all people.
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You could consider donating real estate, such as a home, vacation property, undeveloped land, farmland, ranch, or commercial property.
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You can use stocks, bonds, and mutual funds that have grown in value to create your legacy of inclusion with Special Olympics.
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Income taxes to your beneficiaries on retirement assets can be as high as 37%. This means, for example, that a $100,000 IRA will be worth only $63,000 when it gets to your loved ones.
Naming Special Olympics as a beneficiary of your retirement assets generates no income taxes. Special Olympics is tax exempt and eligible to receive the full amount, bypassing any income taxes. This means, for example, that a $100,000 IRA given to Special Olympics will be worth the full $100,000.
To name Special Olympics as a beneficiary of a retirement plan, simply contact your plan’s administrator.
- You must be 70 ½ or older.
- An individual may transfer up to a total of $100,000 per year and a married couple may give up to $200,000.
- Your gift must be transferred directly from your IRA account to Special Olympics.
- Your gift is a transfer of funds from your IRA to Special Olympics, so while you do not receive a charitable deduction, it does not create taxable income for you.*
- The transfer of funds can count towards your annual Required Minimum Distribution from your IRA.*
If you’re interested in this popular way to support Special Olympics, download a sample letter for your IRA administrator here.
Congress has waived the annual Required Minimum Distribution from IRA Accounts in the year 2020 as part of the CARES Act in response to COVID-19. Please consider seeking advice from your financial advisor or tax professional to understand how recent changes to laws governing retirement plans may impact you and your charitable gift.
The new Setting Every Community Up For Retirement Enhancement (SECURE) Act, just signed in December 2019, has tax, retirement, and estate planning implications for many people.
- The SECURE Act raises the Required Minimum Distribution (RMD) age. If you turn 70 ½ on or after January 1, 2020, you can now wait until you are 72 before you are required to take your Required Minimum Distribution from your IRA.
- You may still make a gift to Special Olympics and other charities through a Qualified Charitable Distribution starting at age 70 ½. However, if you make IRA contributions after age 70 ½, as allowed under the SECURE Act, the amount you have available for qualified charitable distributions is reduced. Please consult your tax or financial advisor to learn how this may impact you.
- The SECURE Act repeals the maximum age for making IRA contributions. You can now contribute to your IRA even if you are over age 70½ (subject to annual limitations).
- The SECURE Act decreases the time over which inherited IRAs may be distributed. Inherited IRAs must now be distributed completely within 10 years of the IRA owner’s death, unless the IRA beneficiary is the surviving spouse; disabled or chronically ill; less than 10 years younger than the owner; or the owner’s minor child. Under these rules, naming Special Olympics as a beneficiary of your IRA may be an even smarter charitable planning decision.
An Exception for Beneficiaries with Special Needs
The SECURE Act makes exceptions for IRA beneficiaries who are considered disabled according to the IRS. These individuals can receive the funds in the form of required minimum distributions based on their life expectancy rather than within 10 years. Also excluded from the 10-year rule are beneficiaries who are considered chronically ill or who are less than 10 years younger than the account owner.
But what happens if an IRA owner wants to designate as the beneficiary a person with a disability who is also the beneficiary of a special needs trust (SNT)? The new law states that the IRA owner can designate an SNT as the beneficiary, and the trustee can use the required minimum distributions to pay for the care and support of the person with special needs. This information is not legal advice. Please seek advice from your attorney at all times.
- Request a beneficiary designation form from your life insurance company and make Special Olympics a full, partial or contingent beneficiary.
- Sign over a fully paid policy. You will be allowed a tax deduction for your generosity.
- Notify us of your insurance gift intention. Let us know by filling out our gift declaration form and we will be able to thank you for your generosity.
- You could reduce your income taxes
- You might receive additional tax deductions if you make annual gifts so Special Olympics can pay the premiums
- You can see firsthand how your gift supports athletes if Special Olympics cashes in the policy
- You can create your legacy of inclusion through the power of sport. If Special Olympics retains the policy to maturity, or you name it as a beneficiary, once the policy matures, the proceeds of your policy will be paid to Special Olympics
- An immediate gift of real estate: Donating property outright to Special Olympics frees you from the costs and responsibilities of ownership. If you have owned the property more than a year, you will enjoy a charitable income tax deduction equal to the property’s full fair market value. You will eliminate any capital gain and the gift reduces your future taxable estate.
- A gift of real estate by bequest: You can include a gift of real estate to Special Olympics in your will or living trust and you will be eligible for a charitable estate tax deduction upon your death.
- A retained life estate: You donate your home to Special Olympics but retain the right to live in it for the rest of your life, a term of years or a combination of the two.
If you have any questions about gifts of real estate, please contact us. We would be happy to assist you and answer any questions that you have.
- You may receive a charitable income tax deduction for the full market value of the securities (up to a maximum percentage of your adjusted gross income as dictated by tax law);
- You could avoid paying the capital gains tax on any increase in the value of the stock you give.
If you’re interested in this popular way to support Special Olympics, download our easy-to-use form here.