The Legacy IRA Act and Charitable Rollover Gift Annuities

In the final hours of the 117th Congress, provisions of the Legacy IRA Act included in an omnibus spending bill (the Consolidated Appropriations Act, 2023 or H.R. 2617) passed the House and Senate and were signed into law by President Biden, creating a new charitable gift planning opportunity.

Donors over 70½ can make a charitable contribution to Massachusetts General Hospital from their IRA accounts and receive a lifetime of payments in return. This new gift plan combines a charitable gift annuity and a Qualified Charitable Distribution from an IRA. Here’s how it works:

• A charitable gift annuity is a simple contract between you and Mass General promising to pay you a fixed amount of money each year for life. The amount paid to you will depend upon your age at the time of your gift and does not change for the rest of your lifetime.
• A Qualified Charitable Distribution is a contribution from your IRA to Mass General. You can make a Qualified Charitable Distribution if you are at least age 70½. Unlike most distributions from your retirement account, you pay no income tax on a Qualified Charitable Distribution.
• Under the Legacy IRA Act, donors can now make a Qualified Charitable Distribution in exchange for a charitable gift annuity. There are some rules and limitations. You can do it only once and there is a limit of $50,000. The entire payment you receive from your charitable gift annuity will be subject to income tax. There is no income tax deduction for your contribution (although there is no tax on your Qualified Charitable Distribution either).

For more information on if this gift is right for you, please contact the Office of Planned Giving at 617.643.2220.