A new tax law allows donors over 70½ to make a charitable contribution to Amherst from their IRA accounts and receive a lifetime of payments in return. This new gift plan combines a charitable gift annuity and a Qualified Charitable Distribution from an IRA. Here’s how it works.

A charitable gift annuity is a simple contract between you and Amherst promising to pay you a fixed amount of money each year for life. The amount paid to you will depend upon your age at the time of your gift and does not change for the rest of your lifetime.

A Qualified Charitable Distribution is a contribution from your IRA to Amherst. You can make a Qualified Charitable Distribution if you are at least age 70½. Unlike most distributions from your retirement account, you pay no income tax on a Qualified Charitable Distribution.

Under the new law, donors can now make a Qualified Charitable Distribution in exchange for a charitable gift annuity. There are some rules and limitations. You can do it only once and there is a limit of 53,000. The entire payment you receive from your charitable gift annuity will be subject to income tax. There is no income tax deduction for your contribution (although there is no tax on your Qualified Charitable Distribution either).

Please contact Julie R. Lackner, JD at 413-542-5193 or jlackner@amherst.edu for more information. We would be happy to work with you and your advisors to help determine how this new option might work for you.