Help ensure Pennsylvania farmland stays in productive agriculture.
Be A Farm Link Legacy Partner
Help ensure Pennsylvania farmland stays in productive agriculture
Pennsylvania Farm Link, a 501(c)(3) non-profit, has successfully created 25 years of next-generation farming opportunities via a land-linking database and succession planning. Thanks to the CARES Act of 2020 and the Consolidated Appropriations Act of 2021, this window of legacy-giving has gained substantial value as a tax-reducing vehicle.
Farm Link is continually developing programs to benefit retiring landowners and next-gen farmers. Our latest innovation, “Communication skills and stress-reducing strategies for the farm” focuses on women in agriculture.
Now you can use four financial gifting tools to help ensure farmland in the Keystone State stays in productive agriculture and in the hands of next-gen farmers.
Make a QCD gift this year
70-somethings can reduce taxes, yet make tax-free charitable gifts. The federal Tax Cuts and Jobs Act eliminated itemized charitable deductions for most taxpayers. But it also opened an opportunity to make Qualified Charitable Distributions (QCDs) directly from IRAs to 501(c)(3) organizations like Pennsylvanian Farm Link.
The QCD is an attractive, tax-smart opportunity for seniors with charitable inclinations, and it has been extended through 2021. Here’s how it works:
If you’ve reached age 70½, you can make up to a $100,000 cash donation to Farm Link, and 100% of that amount is excluded from your adjusted gross income (AGI). It also reduces potential tax impact on Social Security and Medicare benefits.
Custodian-managed IRAs – traditional, rollover, inherited, SEP (inactive plans only) and SIMPLE (inactive plans only) – are eligible. Pulling QCDs out of tax-free Roth IRAs is generally inadvisable.
A QCD taken from your traditional IRA counts as a distribution under the Required Minimum Distribution (RMD) rules. You can donate all or part of your annual RMD (up to the $100,000 limit) that you would otherwise be forced to receive and pay taxes on.
There is a $100,000 limit per individual for any one year. If you and your spouse have separate IRAs, each is entitled to that $100,000 annual QCD limit.
Sources: Fidelity Investments, MarketWatch, IRS
'Above-the-line' cash gift
The CARES Act still allows you to contribute up to $300 cash even if you don’t itemize for 2021. Joint filers can donate up to $600, also reducing the AGI.
A beneficiary designation
Designating Farm Link as a beneficiary on your retirement plan, appreciated assets, life insurance, certificate of deposits (CDs) or bank accounts is simple to do:
- Appreciated assets: Gifting appreciated assets such as stock or land may help reduce your capital gains exposure.
- Ira or 401(k) plan: Contact your plan administrator for a “change of beneficiary” form for making a tax-free gift.
- Life insurance: Ask your insurance agent to request a “change of beneficiary” form. Another option is purchasing a paid-up policy designating Farm Link as its beneficiary.
- Bank Account or CD: Contact your bank or credit union for the proper form to set up a “payable on death” designation for Farm Link.
In your will
Including Pennsylvania Farm Link in your will is as easy as adding a codicil to your existing will. You can choose to give a portion of your estate, or even your residual estate after payment of other gifts.
You may direct your legacy gift “wherever the need is greatest”, to Pennsylvania Farm Link’s endowment fund or for a specific purpose. We look forward to learning about your legacy goals and helping you find the best fit.
Note: Federal tax policies change from year to year and with new administrations. Always consult with trusted professionals for legal, financial, insurance and estate planning advice before making any gifting decision.