A Gift from an IRA

With a gift to Southwestern Medical Foundation or UT Southwestern Medical Center from your IRA, you have a few options for making a powerful impact.

OPTION 1: A Traditional Qualified Charitable Deduction (QCD)

You may find this appealing if you would like to make an immediate gift to Southwestern Medical Foundation or UT Southwestern that counts toward your required minimum distribution (RMD). It works like this:

• If you are an IRA owner age 70½ or older, you can direct a transfer from your IRA directly to us.
• The gift does not qualify for an income tax deduction, but any amount up to the annual aggregate limit ($105,000 in 2024) is tax free.
• The gift counts toward your RMD if one is due (generally, beginning at age 73).
• Your gift has an immediate impact on our work, and you can make this gift every year if you choose.

Calculate your RMD

OPTION 2: A New Qualified Charitable Deduction

This option lets you make a gift that counts toward your RMD and also creates a new income stream for retirement. It works like this:

• If you are an IRA owner age 70½ or older, you can direct a one-time transfer from your IRA to create a new charitable gift annuity (CGA) or charitable remainder trust (CRT).
• The gift does not qualify for an income tax deduction, but any amount up to the limit ($53,000 in 2024) is tax free.
• The gift counts toward your RMD if one is due (generally, beginning at age 73).
• Spouses may contribute up to $53,000 each from their own IRAs into a single CRT or a joint-life CGA.
• Income payments may only go to the IRA owner and the owner’s spouse and are taxed at ordinary income tax rates.
• This is not an annual gift—you may only use this option once.

To learn more about these options, click here to read about charitable gift annuities or charitable remainder trusts. Keep in mind that some of the rules and requirements differ if you fund the CGA or CRT from your IRA. (links to CGA page and CRT page)

OPTION 3: A Charitable Beneficiary Designation

You may prefer this option if you want to make a comfortable future gift that costs you nothing today. It works like this:

• At any age, ask your IRA custodian for a change-of-beneficiary form.
• You can name Southwestern Medical Foundation as the sole beneficiary or percentage beneficiary.
• You pay nothing now and retain the right to change your gift if your needs and goals change.
• At your death, we will receive the designated assets from your IRA.

Evaluate the Fit

A gift from your IRA may be a particularly good option to consider if you:

• Are an IRA owner age 70½ or older
• Want to avoid paying tax on your required minimum distribution
• Want to establish a source of fixed income payments to supplement other income streams in retirement
• Are looking for a flexible, easy way to make a significant future gift

See How it Works

Pat, age 75, is required to take a taxable IRA distribution of $15,000 this year. Pat wants to support UT Southwestern Medical Center and decides to make a qualified charitable distribution, transferring $15,000 directly from the IRA to Southwestern Medical Foundation. The transfer counts toward Pat’s RMD, satisfying the distribution requirement, but no tax is due on the distribution. The full amount of the transfer supports our mission—nothing is lost to taxes!

This year, Sam (age 75) makes a one-time, tax-free QCD of $53,000 to fund a CGA with us—an easy way to make a powerful impact on our work. Sam will receive an annual payment of $3,710 for life, and these payments are taxable each year. If Sam had decided to personally receive the $53,000 distribution this year instead of using it for a QCD, the full amount would have been currently taxable.

Consider Your Timing.

The traditional QCD can usually be accomplished if you begin the process in early December. The new QCD option may require a bit more time to set up the CGA or CRT. A beneficiary designation is quick and easy to make at any time.

We Can Help

We can provide you with more information about any of these options for using your IRA assets to make a gift. You will work directly with your IRA custodian to accomplish these gifts, but please let us know so we can provide substantiation for your QCD gifts. If you make a beneficiary designation, we would like the opportunity to thank you.

We appreciate you including us in your planning.

Making Southwestern Medical Foundation a beneficiary of your IRA qualifies you for membership in The Wildenthal Society. This is our way to thank you for supporting our future as you plan for yours. Read more about the The Wildenthal Society.