Carol

Alsip

Associate Director of Annual Campaigns
(405) 692-3185
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Gifts of Retirement Plans

Gifts made from retirement plans must be considered "qualified plans" funded by pre-tax dollars and allowed to grow in a tax sheltered environment. These funds include IRA's, 401(k) and 403(b) accounts, pension plans and some others. Several factors, like heavy income taxes lurking around the corner for retirement plans, or even the possible mismanagement of an employer's retirement plan for an employee, could make it advantageous to remove the assets from other plans and 'roll them over' into an IRA without suffering income tax penalties. Any balance left in the account after death is considered 'income respect of a decedent' meaning that it is income that has not been taxed while the person was alive. Indeed, it will be taxed twice: first, under estate tax rates, and second, under income tax rates.