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CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience:  over 40 years experience in tax matters
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i AM A 72 YEAR OLD REtired Federal employee who needs to distribute

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i AM A 72 YEAR OLD REtired Federal employee who needs to distribute my TSP naccount (similar to a 401K). All contributions are from me, none from my e3mployer. I wish to place my annuity funds in a charitable gift annuity fund with a qualified charity organization. I have been told that this will incur negative tax consequences,without any specifics. I need information about this so that I can take care of estabishing an annuity. I prefer a charitable tax annuity because I do not have any one I want to use as a beneficiary. use as a beneficiary
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

The only negative tax aspect of this is that contributions have limits as to their deductibility while the "income" donated will be fully taxable. The limit on monetary contributions is 50% of your Adjusted Gross Income (the botXXXXX XXXXXne on page 1 of your federal return). If this contribution is within the 50% limit and you are able to itemize deductions you can feel free to proceed with this. Also, you should take into account that contribution deductions which cannot be used in one year can be carried forward to the next year and any unused amount there can be carried to the following etc until used up.

Customer: replied 3 years ago.

The only income will be yearly payments startig in 2012. The amount I would be setting up is about $50,000 and payout would be once yearly. The total of $50,000 is roughly equivalent to my yearly income, but the amount received each year would be less tha $3,ooo. Normally, this type of annuity has tax benefits due to the charitable contribution thereby reducing the total taxes each year.

Would this be true i my case?

 

By the way, my inten is to have the funds tansferred direct from the TSP to the charitable orgaization.

 

BJS

 

 

 

 

 

the only

Expert:  CGCPA replied 3 years ago.
You will receive the tax deduction for the $3000 each year but will also need to reflect the same amount as income on your returns. The tax effect will be zero. You should get a letter each year from the charity to substantiate the deduction.
CGCPA, CPA
Category: Tax
Satisfied Customers: 3740
Experience: over 40 years experience in tax matters
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