I think I hate IRA’s

[iris lilies]

So many rules surrounding this kind of money. So. Many. Rules.
I reported a couple weeks ago that we are now going to start giving money out of our IRAs to qualified charities. We even got two checkbooks, one for my IRA and one for the IRA of DH.


Then I ran across this old thread

http://www.simplelivingforum.net/showthread.php?18335-Help%97IRA-distribution-to-qualified-charity&highlight=qualified+charity

… which makes it clear we need to be 70.5 years old. We are not that old yet.

One of our financial guys suggested it when we were talking about moving money to the charitable arm of one of our investment firms. But I doubt that he checked our age for this activity.

I will check with our tax guy to make sure, but it looks like we have to be 70 1/2 to be moving money out of an IRA directly to a charity and neither party pays tax. F..u…xx..k it.

[iris lilies]

And then, when we were meeting with our attorney to update our will and trust this week, she went into lots of blah blah blah about IRAs, and how they have special requirements and special rules when that money is left to heirs. Jesus God. it’s so complicated, that info stayed in my head for a minute and then left. I can’t tell even tell you what it’s all about.

This is all so complicated so that the government is sure to get its pound of flesh from any of that money sitting in IRAs. The government is hovering over it all, watching carefully, filling the world with lots of rules and gotchas if anyone touches that money that they have yet to get their claws into.

[littlebittybobby]

Okay---As soon as you get that done, you prolly should sit down and review all of your insurance coverage. You've GOT rto have total insurance coverage, on everything! So--get several Umbrella Policies, that cover everything that your other policies may've missed. Someday, that airliner you siting on may have a total engine failure over the Atlantic, due to an act of God; Someday, a trucker may be heading the WRONG WAY on the 4 lane, right toward you, on your way to a flower show! And the trucker let his policy lapse, two days before! So, you'll need plenty of insurance coverage. Yup. Hope that helps you some515551565156

[iris lilies]

Okay---As soon as you get that done, you prolly should sit down and review all of your insurance coverage. You've GOT rto have total insurance coverage, on everything! So--get several Umbrella Policies, that cover everything that your other policies may've missed. Someday, that airliner you siting on may have a total engine failure over the Atlantic; Someday, a trucker may be heading the WRONG WAY on the 4 lane, right toward you, on your way to a flower show. And the trucker let his policy lapse, two days before. So, you'll need plenty of insurance coverage. Yup. Hope that helps you some


I actually was going to review insurance coverage this year, but decided not to since I hear it’s going up all over anyway. But we do not insure everything, we insure for the big stuff and then, with high deductibles. But since you have no assets to protect you can do you little Bobby.

[Tybee]

And then, when we were meeting with our attorney to update our will and trust this week, she went into lots of blah blah blah about IRAs, and how they have special requirements and special rules when that money is left to heirs. Jesus God. it’s so complicated, that info stayed in my head for a minute and then left. I can’t tell even tell you what it’s all about.

This is all so complicated so that the government is sure to get its pound of flesh from any of that money sitting in IRAs. The government is hovering over it all, watching carefully, filling the world with lots of rules and gotchas if anyone touches that money that they have yet to get their claws into.

But you have already received all kinds of tax benefits from the IRA. When is the govt supposed to get to take out the taxes, if not when you take it out? The charity thing makes sense. It made no sense to me when you said you could write a check to a charity--I had never heard of that, and have taken money our of an IRA for 25 years. But it's cool that you can do it at 70.5, extremely cool, just earmark it and wait and have a party when you send the first check.

Ditto heirs. What my husband inherits from it will be different than what the kids inherit, what he can do and they can do. There is so much out there to read about IRA's and they've been a wonderful tool for accumulation with the tax deferment.

[littlebittybobby]

Okay---Aways rember: FCSP&G. Yup. Food, Comfort, Security, Prestige, and Graaaaandkids! Do that,and get piles of insurance so you'll be totally protected. Yup.

[iris lilies]

But you have already received all kinds of tax benefits from the IRA. When is the govt supposed to get to take out the taxes, if not when you take it out? The charity thing makes sense. It made no sense to me when you said you could write a check to a charity--I had never heard of that, and have taken money our of an IRA for 25 years. But it's cool that you can do it at 70.5, extremely cool, just earmark it and wait and have a party when you send the first check.

Ditto heirs. What my husband inherits from it will be different than what the kids inherit, what he can do and they can do. There is so much out there to read about IRA's and they've been a wonderful tool for accumulation with the tax deferment.

oh, I know, you are right, I just like to bitch and moan. Let me have my whine! Haha

[Yppej]

So can't you take it out without penalty at 59 1/2? What keeps you from taking it out and then giving it to charity?

[sweetana3]

Oh God yes, I got a beneficiary IRA and it was complex!!! BUT, I will be dead when my IRA leftovers are distributed. In our case, all that is left is going to charities so I do not have to think about it. The laws were recently revised and it is more complicated than when I inherited. I love having a special checkbook to write checks to the charities from the IRA.

Funny thing. My genius brother has to file a gift tax return. He made the mistake of thinking he could just read a publication and understand it. Did not ask me who had 31 years of answering IRS questions. In fact, when I gave him an answer and even another person said the same thing, he did not believe us. No gift tax unless you give away $12 million in your lifetime. Yes to form, no to tax to pay. He still thinks we are wrong.

Throw in major charitable foundation donations and the level of complexity jumps too. Can help with tax management when large income comes in but not for us.

[iris lilies]

So can't you take it out without penalty at 59 1/2? What keeps you from taking it out and then giving it to charity?
I have to pay a tax when I take it out. I don’t have to pay “penalty “but I have to pay tax. I’m trying to avoid the government getting its pound of flesh


When I’m 70.5 years old I can move money from an IRA to a qualified charity, and neither party has to pay any tax. The federal government will get nothing. Zero. It will get what it deserves zero.

[iris lilies]

Oh God yes, I got a beneficiary IRA and it was complex!!! BUT, I will be dead when my IRA leftovers are distributed. In our case, all that is left is going to charities so I do not have to think about it. The laws were recently revised and it is more complicated than when I inherited. I love having a special checkbook to write checks to the charities from the IRA.

Funny thing. My genius brother has to file a gift tax return. He made the mistake of thinking he could just read a publication and understand it. Did not ask me who had 31 years of answering IRS questions. In fact, when I gave him an answer and even another person said the same thing, he did not believe us. No gift tax unless you give away $12 million in your lifetime. Yes to form, no to tax to pay. He still thinks we are wrong.

Throw in major charitable foundation donations and the level of complexity jumps too. Can help with tax management when large income comes in but not for us.

yes! Beneficiary IRA! Ugh.

[jp1]

All this makes me wonder, I still have about $1500 in an IRA I inherited from my father. I've been dutifully taking the required distribution every year for the past nine years, but since it was the IRA of someone well past 70.5 when they died can I donate it to charity and not have to pay tax on the withdrawal? If that's the case I'll make a $1500 donation to one of my regular charities and be done with the stupid thing.

[iris lilies]

All this makes me wonder, I still have about $1500 in an IRA I inherited from my father. I've been dutifully taking the required distribution every year for the past nine years, but since it was the IRA of someone well past 70.5 when they died can I donate it to charity and not have to pay tax on the withdrawal? If that's the case I'll make a $1500 donation to one of my regular charities and be done with the stupid thing.

Good question! I have no idea.

[sweetana3]

I am pretty sure you the owner of IRA whether you donated or inherited have to be 70.5 to make a QCD. It does not appear the age of the individual who died and left the IRA is considered.

Who can make a qualified charitable distribution?
An individual donor can contribute up to $100,000 per year in QCDs, as long as that individual is 70½ years old or older. For married couples, each spouse can make QCDs up to the $100,000 limit for a potential total of $200,000.

The $100,000 per person limit applies to the sum of all QCDs taken from all IRAs in a year. A donor can make one large contribution or several smaller contributions over the course of the calendar year. Remember that QCDs can be made from any or more than one of the IRA types (traditional, inherited, inactive SEP and inactive SIMPLE IRAs) noted above.

[Rogar]

I'm going to ask my accountant about this when he helps with taxes, but I'm not too sure I understand. When money goes from the IRA to a charity, neither party pays taxes, but you don't get anything either. Unless you are jockeying for a lower tax bracket, you could take the money yourself and get at least a fair share of it after taxes. Charities are among my beneficiaries when I go and are welcome to whatever is left after any expensive end of life care, but I'm in no hurry.

[iris lilies]

I'm going to ask my accountant about this when he helps with taxes, but I'm not too sure I understand. When money goes from the IRA to a charity, neither party pays taxes, but you don't get anything either. Unless you are jockeying for a lower tax bracket, you could take the money yourself and get at least a fair share of it after taxes. Charities are among my beneficiaries when I go and are welcome to whatever is left after any expensive end of life care, but I'm in no hurry.
I wish to give to charity. This method maximizes the dollars that go there.

sure, it does nothing for my own pocketbook and that is fine. And as a side reason which is emotional, it gives the federal government NOTHING because I am big mad.

I want to give a steady stream, one that I have complete control over. I do not want to dump one big lump sum into a Directed fund and have gains from that fund doled out to a charity, one reason being that the gains may be small.

I’m really mad at taxes this year because we got hit with an an approximately $30,000 bill and this is on top of our usual income tax bill which last year was $18,000.

[Rogar]

I wish to give to charity. This method maximizes the dollars that go there.

I understand now. I give some money to charities through the year, but it's not organized and gets spread around smaller amounts to several causes. I need a way to consolidate, organize and simplify if it's coming out of my IRA. I'm guessing it could be set up as a direct transfer that would be effortless.

I'd like to think I worked hard and saved for whatever I have and would like to have as much control over where it goes as possible, which doesn't include taxes as long as things are legal. I do plan on sharing.

[nswef]

IL, I started doing that last year, donating directly to the charity. My husband prefers to get the taxable income...It's pretty easy through our broker. This year I divided it among three and you can change them every year. Feel free to whine!!!!