HOW IT WORKS.
Name the Daughters of the Nile Foundation as a beneficiary of your 401K, IRA or other type of retirement account.
· This will avoid the potential double taxation of the estate tax and income tax that your heirs would pay.
· You can always change the beneficiary designation if your family’s financial circumstances change.
· During your lifetime you continue to take distributions from your retirement accounts.
Unique opportunity in 2011 and how it works:
· Congress has extended the provisions of a law that allows individuals who are age 70½ and older to make direct transfers from an IRA totaling up to $100,000 per year to 501(c)(3) charities, including the Daughters of the Nile Foundation, without having to count the transfers as income for federal income tax purposes.
· The transfer must come directly from an IRA. If you have a 401K or other type of retirement account, you must first rollover the funds into an IRA and then direct the transfer to the Daughters of the Nile Foundation.
· You do not have to recognize the transfer of income for Federal income tax purposes. However, you are also not entitled to an income tax charitable deduction. Check with your tax preparer on the effect of your particular State income tax laws.
· IRA charitable rollovers count towards your minimum required distributions for the year.