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Using IRA to make gifts for life insurance premiums

  • 1.  Using IRA to make gifts for life insurance premiums

    Posted 14 days ago
    We have a donor who has made us the owner & beneficiary of her life insurance policy. We pay the premiums on the policy, but she has made donations to us in the amount of the annual premiums, for which we've issued tax receipts.  Now we have received a large payment from her IRA equal to the balance of her remaining life insurance premiums.  Is there any conflict there or regulations because the gift is coming from her IRA?

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    Gwen Donev
    Director of Advancement Services
    Gustavus Adolphus College
    gwendonev@GUSTAVUS.EDU
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  • 2.  RE: Using IRA to make gifts for life insurance premiums

    Posted 14 days ago
    Nope.  You are the owner of the policy.  The donor is making a voluntary contribution to you and the distribution would normally qualify as a tax-deductible donation.  They are not receiving any benefits in exchange.  Of course, you might want to contact the financial institution for assurance.  If this is a QCD I'd probably double-check.  There are a few rules for those, such as the distribution cannot go to a private foundation or a charitable supporting organization.

    But, if it's an RMD I do not think you have anything to worry about.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987