Consolidated Appropriations Act of 2023

As a result of this legislation, beginning in 2023, individuals 70 ½ years of age and older may now establish a charitable gift annuity (CGA) with a qualified charitable distribution (QCD) from an IRA.

Key Benefits

• A QCD that establishes a CGA may satisfy all or a portion of the donor’s required minimum distribution to minimize adjusted gross income;
• The CGA provides a fixed annual payout for life that is unaffected by stock market performance or interest rate fluctuations;
• The CGA will transfer and spread income tax owed on the donor’s required minimum distribution over the life of the annuity instead of paying all income tax at the time of the distribution;
• The CGA agreement between donor and the College allows the donor to direct the remainder of the gift to the program or programs that are most meaningful to the individual;
• The CGA agreement between a donor and the College allows the donor to create an endowment fund that bears his/her name or is named in honor of an important figure in their life while supporting Lafayette students in perpetuity.

Variations from CGAs Funded with Cash or Appreciated Property

• Using a QCD to establish a CGA is permitted in only one year of a donor’s lifetime up to an aggregate amount of $53,000 (2024). A donor may establish one CGA of $53,000, or some combination of CGAs totaling $53,000, but all CGAs must be established in the same calendar year;
• Married couples may establish up to $106,000 in CGAs provided that $53,000 comes from each individual’s IRA;
• A QCD given to establish a CGA counts toward the individual’s $105,000 (2024) annual QCD limit;
• Annuitants of a CGA established with a QCD may only be the donor or the donor and the donor’s spouse;
• With a QCD that establishes a CGA, the donor does not receive a charitable deduction for the gift;
• The entirety of all annuity payments is taxed at the donor’s ordinary income tax rate;
• Deferred payment CGAs are not permitted;
• CGAs funded with a QCD must be non-assignable, which also includes Lafayette College. Annuitants must receive the payments for the remainder of their lifetime.