Gifts of Retirement Assets
(Gift example*)
How can you give more to your heirs with less? For the sake
of simplicity, let’s assume you have $300,000 in an IRA and appreciated
stock worth $250,000. Assuming you are in the 45% estate tax bracket, you can see
that your heirs actually benefit more from the lower valued gift of stock.
|
IRA
to Charity |
Stock
to Heirs |
IRA
to Heirs |
Value
of IRA |
$300,000 |
$250,000 |
$300,000 |
Estate
tax (45%) |
$0 |
$112,500 |
$135,000 |
Transfer
to Heir |
|
$137,500 |
$165,000 |
Less
income tax (33%) |
|
$0 |
$54,450 |
Remainder
to charity/heirs |
$300,000 |
$137,500 |
$110,550 |
Total
Tax |
$0 |
45% |
63% |
*This
example is based on a factor that changes monthly. Contact our office
for a personal illustration based on the latest rates. |
What if I’m not affected by the estate tax.
The income your heirs receive from your IRA is called “Income
in Respect of Decedent“ (IRD). IRD is taxable upon transfer and at the
donor’s highest tax rate. However, the gift of stock is taxable when
the heirs sell the shares; and then in only the gain that has occurred from
the date of transfer is taxable – typically at the 15% tax rate.
For more information
Email us, complete the personal illustration form, or call us at (800) 797-8022 Ext. 5 so that we can assist you through every step of the process. | 
