Gifts from tax deferred qualified retirement accounts – Leave the world a better place.
Many donors are interested in learning more about the ways in which their tax deferred retirement plan assets might be used to develop youth and conserve natural resources for a strong, sustainable community. Since there are significant restrictions on how and when transfers and distributions may be made with retirement plans, anyone considering such a gift should review their situation with their retirement plan administrator, tax professional or financial advisor.
Retirement plans such as 401(k) s, IRAs or Keogh accounts are typically funded by an individual, by his or her employer, or both. Most retirement plans are made up of assets which are not taxed so long as the assets remain within the particular retirement plan - in other words, the plan is generally comprised of untaxed contributions and untaxed earnings. The exception to this is the Roth IRA.
While there are a variety of different types of retirement plans, typically distributions from the plan become taxable at the time when they are paid out to the beneficiary or beneficiaries. Disbursement of retirement plan funds generally occurs because the beneficiary of the plan:
- has reached retirement;
- has reached a certain age and is required to take distributions from the plan;
- has become seriously ill, disabled or otherwise incapacitated; and/or
- has died, and the retirement plan assets must then be distributed to the individual's estate or other beneficiaries named within the plan.
With the exception of one's surviving spouse, the heirs who receive distributions from another person's tax deferred plan could find themselves subject to as many as three different types of taxation:
- income tax
- estate tax
- generation skipping transfer tax
The net result is that the value of the asset can be significantly reduced. However, many retirement plans permit a charity to be named as a beneficiary. Upon the death of the retirement plan participant, the interest passes to charity and is tax- free since charities are generally tax-exempt. Naming Conservation Corps North Bay as a beneficiary of a tax deferred retirement plan is therefore an excellent way to develop youth and conserve natural resources for a strong, sustainable community. It is important to verify that your plan allows this provision. Your plan administrator may require the following information: Conservation Corps North Bay is a "California nonprofit public benefit foundation," incorporated in the State of California on February 6, 1985, and is classified as tax-exempt under Internal Revenue Code 501(c)3. The tax identification number for Conservation Corps North Bay is 94-2831592.
Before making a donation to Conservation Corps North Bay, we recommend that you consult your advisor or attorney for full advice on the effect of your gift.
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