The Legacy IRA Act is a tax law that allows donors over 70½ to make a charitable contribution to Elizabethtown College from their IRA accounts and receive a lifetime of payments in return. This special gift plan combines a Charitable Gift Annuity and a Qualified Charitable Distribution from an IRA.
Here’s how it works:
A Charitable Gift Annuity (CGA) is a simple contract between you and Elizabethtown College 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 (QCD) is a contribution from your IRA to Elizabethtown College. You can make a QCD if you are at least age 70½. Unlike most distributions from your retirement account, you pay no income tax on a QCD.
Under the law, donors can now make a QCD in exchange for a CGA. 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 CGA will be subject to income tax. There is no income tax deduction for your contribution, although there is no tax on your QCD either.
For more information, please contact Mark A. Clapper ’96 at clapperm@etown.edu or 717-361-1499.