Case of the Week: Standard Deduction and the IRA Rollover

Case of the Week: Standard Deduction and the IRA Rollover

Thanks to The Dallas Foundation for connecting us to the GiftLaw Case of the Week:

CASE
Judy was a retired nurse and a volunteer for her favorite charity. During her working years Judy had never enjoyed a large salary. Fortunately, a portion of her income was regularly transferred to her retirement plan for almost 40 years. With good investments and tax-free growth, Judy's retirement plan had increased to over $435,000.

QUESTION
Judy is now age 78, owns her home and has more income then she needs. Each year she makes a gift of $1,000 to her favorite charity. Because she does not have home mortgage interest or enough other deductions to itemize, Judy takes the standard deduction. But she has heard about the IRA charitable rollover and wonders if that will be a good option. She asked her best friend, "Do you think that I should give the $1,000 from my IRA?"

SOLUTION
To view the solution to this Case of the Week, Click Here.

[where: 75223]

Case of the Week: Ralph -- The Major IRA Donor

Thanks to the Dallas Foundation for this Case of the Week:

Case
Ralph is a retired investment advisor. He watched his IRA blossom and grow through good investments. It now was the largest asset in his estate. Based on his age of 79 and the increased value, his required distribution this year was nearly $100,000!

Question
Ralph is a frequent volunteer for his favorite charity and wants to make a major gift to a special project. In October, he decided that he did not actually need the distribution for this year. With the growth of his IRA, it was logical to make the gift from his IRA. But how can this work? Is this a good tax planning strategy?

To view the solution to this Case of the Week, Click Here:

http://www.giftlaw.com/casewk.jsp?WebID=GL2002-0414&D=200843.

[where: 75223]