Investment Portfolios and Retirement Accounts
There are two options when choosing the name the CAF as a beneficiary in your investment portfolios and retirement accounts:
1. The Protecting Americans from Tax Hikes Act of 2015, extended the IRA Charitable Rollover permanently. The extension allows individuals age 70 1/2 and older to donate up to $100,000 from their IRAs to the CAF tax-free. You do not receive an income tax charitable deduction. This provision allows you to transfer money from your IRAs directly to the CAF, without having to recognize the transfer as taxable income. You should consult with your tax advisor about your specific situation.
2. Designating the CAF as the beneficiary of retirement assets is one of the smartest ways for you to make a gift to the CAF and bypass multiple levels of taxation. Qualified retirement savings are generally subject to federal income tax as they are withdrawn from the plan. Failure to take the required minimum distribution after the age of 70 1/2 results in a 50% tax on the undistributed amount. At death, any remaining account balance is included in the calculation of the gross estate and may be subject to both income and estate taxes. Lastly, a generation-skipping tax may apply to substantial account balances that pass to grandchildren or to other remote generations. These taxes can consume up to 75% of the retirement assets.
Careful planning for the disposition of retirement plan assets can help to avoid undesirable tax costs. Naming the CAF as the beneficiary of a retirement plan will reduce the size of a taxable estate and avoid income taxation on those funds. In certain situations, a charitable gift of a retirement account can improve the donor's overall tax consequences, increase the amounts passing to their heirs, and escape income and estate taxes.
If you are interested in naming the CAF in your investment portfolios or retirement accounts, follow these next steps:
1. Contact the CAF Development Office at 214-330-1700 or firstname.lastname@example.org for additional information on naming the CAF as a beneficiary or to chat about the different options for including the CAF in your investment portfolios or retirement accounts.
2. Seek the advice of your financial, legal and/or tax advisor.
3. If you include the CAF in your plans, please use our legal name and Federal Tax ID. Legal Name: Commemorative Air Force Address: P.O. Box 764769 Dallas, TX 75376 Federal Tax ID: 74-1484491
4. Print out and return the Heritage Club Membership form.
Note: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.