Retirement accounts
Retirement accounts can be an attractive, tax-favored charitable giving option.
Gifts During Your Life (Qualified Charitable Distributions – QCDs)
When you are 70½ or older, you can make a Qualified Charitable Distribution (QCD) from your traditional IRA.
- The Advantage: You can transfer up to $111,000 (in 2026) directly from your IRA to the KF tax-free. This transfer counts toward your Required Minimum Distribution (RMD) but is excluded from your adjusted gross income (AGI).
- Requirements: You must be at least 70½. The funds must go directly to the charity; they cannot be transferred to a donor-advised fund, charitable gift annuity, or charitable remainder trust.
Example: Mark, age 73, has $350,000 in his traditional IRA. He wants to support the KF. He contacts his IRA administrator to transfer $85,000 directly to the KF as a QCD. Because he met all requirements, the $85,000 is excluded from his taxable income, and the KF receives the full amount.
Gifts Upon Donor’s Death
Retirement accounts are often considered “tax traps” for heirs because they are subject to income tax upon withdrawal. Charities, however, do not pay income tax on these distributions, making them an ideal asset to leave to a non-profit.
Example: Steve has an estate of $10 million, including a $1 million IRA. If he leaves the IRA to his son, his son may lose a significant portion of that balance to federal and state income taxes upon distribution. By naming the KF as the beneficiary of the IRA, Steve ensures the full $1 million supports the Foundation tax-free, and he can leave other, non-tax-deferred assets to his family.
