By Dave Swanson - Summit FM Contributor
The band behind this week’s ‘Essential’ album, partially defined the path of early 80s guitar-based music, in an era where synthesizers had taken over. R.E.M. had their own ideas about where music in the new decade should be headed. Without taking one thing away from their entire, glorious discography, there is an argument to be made for the first chapter in the R.E.M. fables as being their best. The run of records from 'Chronic Town,’ in 1982, through 'Document,' in 1987, is pretty hard to beat. Over the course of those 6 years, R.E.M. stated their case, delivered the goods, and brought a soundtrack to an unsuspecting music world. Call it 'college rock,' 'alternative,' or whatever you like, somewhere between the influences of Wire, Television, the Byrds, and Moby Grape, the jangle ascending glory of R.E.M. came to light.
Their debut single, 'Radio Free Europe' was issued on the Hibtone label, in 1981, making college radio take notice, followed by IRS Records snapping them up to issue the EP, 'Chronic Town.' Their proper debut full length, 'Murmur,' followed in 1983, and with it, swarms of young, enthusiastic fans and rock critics, hunting for more and more accolades to heap upon this quartet from Athens, Georgia. By 1984, the little world of 'college rock' was bursting at the seams with bands like Husker Du, The Replacements, X, The Bangles, and many more, all upping the ante with new releases. R.E.M. stepped up to the plate and knocked it out of the park with 'Reckoning' that year. 2024 marks its 40th anniversary!
From the first jangle that kicks off 'Harbourocat' to the last surging chord of 'Little America' it was clear R.E.M. had rapidly become more focused than they were on the classic debut, 'Murmur.' It was the same team of Mitch Easter and Don Dixon, who helped the band develop its sound and style, that was quickly becoming a signature of not only their own, but of many an up-and-coming band trying to go for that sharp, jangly guitar sound that was firmly melodic pop, but with a unique, less obvious take on the genre. ‘Reckoning’ brought a sharper edge in songwriting, performance, and production.
'Don't Go Back To Rockville,' and 'South Central Rain' were both issued as singles, but made no dent, the latter barely scraping into the Top 100. That being said, both songs, along with 'Pretty Persuasion,' 'Second Guessing,' and '7 Chinese Brothers,' found a place on college radio charts, and helped R.E.M. gain more ground. The album itself made it up to No. 27. Self-assured yet full of wide eyed wonder, it captures the band at a genuine peak. This was rock and roll to be sure, but seemed a world away from the likes of Motley Crue, Ratt, and Quiet Riot, let alone Cyndi Lauper, Prince, or Duran Duran, and yet another world away from 'Thriller,' all ruling the commercial airwaves at the time. At that moment, R.E.M. were arguably kings of the underground, but getting too big for that circle. While many more classics would follow over the years, 'Reckoning' was certainly an early high-water mark, one that still rings out some four decades later.
By Dave Swanson - Summit FM Contributor
The Beatles story is a legend, a living legend, a legend that will live after lots of other living legends have died. Umm, oh wait, that's the Rutles. The Beatles were a pop group from Liverpool, England. Formed in the early 1960s, they would eventually take over the hearts, minds, and souls of an entire generation, and then some. You know, The Beatles!!
Anyway, back to the story at hand. By 1965 The Beatles had released four albums (though the American market would stretch that to eight), each on a significant progression from the previous. The primal urgency of 1963's 'Please Please Me' gave way to a more self-assured sound on 'With The Beatles,' released a mere 8 months later. By the summer of 1964, they were a worldwide phenomenon, and had made their first film, 'A Hard Days Night,' which would also serve as the band’s third LP. On that album, everything came into focus. All songs were self-penned, no covers, and it remains one of their finest, and most solid, albums of their catalog. Another album, 'Beatles For Sale' was on the streets by years' end. It was as much a step forward as it was a step backwards, with six of the fourteen tracks being early rock and roll favorites of the band. That being said, the new Lennon/McCartney songs on the album showed their creative spark was in constant forward motion.
All of which lands us in 1965 and the band's fifth album, and soundtrack to a second film, 'Help!,' and much like the film, the album itself was in full color sonically. When the album was issued in America, it was chopped drastically so as to include incidental music from the film, whereas the original UK LP was a huge step forward. It is, however, interesting to note that the U.S. version of the album contained the first use of a sitar on a Beatles album, granted, as part of the film score, but still worth noting, considering how large that instrument would loom in Beatles lore.
The writing of Lennon and McCartney was quite simply, brilliant throughout. 'You've Got To Hide Your Love Away,' 'Ticket To Ride,' 'I've Just Seen A Face,' 'You're Gonna Lose That Girl,’ and, of course the title song, are all first class Beatles songs. Add to that two ace George songs, 'I Need You' and 'You Like Me Too Much' and a full throttle version of Larry Williams' 'Dizzy Miss Lizzy' ends the album with somewhat of a nod to their roots, from which they were moving on.
From start to end, it stands as one of the band's most solid all around albums. For decades many people have linked 'Rubber Soul' and 'Revolver' as hand in hand albums, in many ways it's actually 'Help!' and 'Rubber Soul' which link up perfectly. The jangling guitars, folk rock inspiration, and more sophisticated arrangements on both lead the way. It’s no surprise then, that the U.S. version of 'Rubber Soul' nabbed a few of the songs from the UK 'Help!' seamlessly. The McCartney signature of 'Yesterday' is also here as is Ringo's take on Buck Owens 'Act Naturally' adding country rock to the Fabs’ repertoire very early on.
'Help!' is truly an essential album, and not simply a great Beatles album. It may be taken for granted as historical, but we must pause to note once again the speed at which The Beatles (and most other bands of the 1960s) operated. It was incredible, insane, and inspirational. The recording of the 'Help!' album began in February of 1965, and was on the streets by early August with 'Rubber Soul' just around the corner, released in December of the same year, and 'Revolver' on shelves eight months later. And remember, we're not talking about rushed 'product' of some generic nature, we're talking about THE BEATLES, and landmark recorded works.
The Beatles may still be omnipresent in 2024, but one thing we can't afford is to take their existence for granted. They were, and remain, a once in a lifetime event, one that changed not only the world of music, but the world in general. Never before, and never again.
By Matt Anthony - Summit FM Digital Media Specialist
I could see it on the horizon. A dark, sinister atmospheric ‘lump’ that was advancing, moving quickly towards me. There was no way I was equipped to out-run it. I had been warned of this day. But how was it possible? That pristine Saturday afternoon had offered unparalleled serenity. Just me, a Jeff Buckley tune dancing inside my noggin, abundant sunshine, and the sexy, motorized rumble of a Triumph Bonneville underneath my leather-clad corpus.
But there it was. It looked like the ‘Darth Vader’ of cloud formations. I realized that I could not turn around. It would do no good, anyway, based on the speed of its movement. And since I was unfamiliar with the roadways in that stretch of eastern Ohio, I felt uncomfortable veering off on to a country road.
I had to face the music.
Riding a motorcycle in inclement weather teaches you about your limitations. It makes you respect that natural order of things. It focuses attention on objects that, in a car, would seem non-existent, like maintaining balance and safety through the build-up of pebbles while cornering. Most importantly, it places your definition of ‘riding defensive’ at the top of the pyramid.
It also introduces you to sounds and feelings that reek of unfamiliarity: large drops of precipitation slamming into a plastic face-shield, a loud, wet chorus of 18 tires separating sheaths of water as a truck invades your space going in the opposite direction, and saturated riding gloves and shins, helpless against a cloud-burst’s onslaught.
To this day, I’m flabbergasted at the thought of the speed of this natural phenomenon, and how quickly it enveloped me that day. I would encounter multiple instances like that one later in my riding career. But I’m equally as amazed at my reaction: sheer panic, then resignation, then outright clarity.
Do what you were taught.
“Hey, world, you know you gotta put up a fight.”
- Michael Franti
Facing an adversity can make us grateful for the experience. We may not have asked for it. We may doubt our ability to weather it. And we may not even know if we’re capable of confronting these things, much less experiencing a victory. But an obstacle can be a path to some form of self-discovery that could make us aware of something about ourselves that we didn’t know was even there.
Losing 10 pounds. Finishing a course started long ago. Finally picking up that guitar. These can be daunting challenges that may cause us, time and time again, to shrug off the inclination to actually start the process.
For me, it was riding a motorcycle. I had always wanted to do it, but I was frightened, and I was constantly told that I couldn’t. But while living in St. Louis, I finally decided to sign up for a course. I struggled. I doubted myself. Heck, I even dropped a motorcycle during an exercise! But getting that certificate and driving home afterwards, with that feeling of satisfaction, was exceptionally gratifying.
I experienced the same feeling while stopping for a coffee after my dance with the dark cloud that day. I was intact. I was safe. I had utilized what I had been taught, and I weathered something that I didn’t think was possible. It felt gratifying to say that I had come through on the other side.
But there’s a fundamental truism to always keep in mind: The clouds never stop. While I no longer ride, the confrontations continue. Riding through a torrential storm with nothing or nobody to protect you has been replaced lately with confronting Donna’s cancer, navigating the Alzheimer’s journey, and trying to come to terms with a life and whether it’s been well-lived. Who will we be when the dark cloud leaves? What will we have learned? Can we find gratitude deep inside the experience, knowing that one lesson learned will lead to yet another that needs addressed? Resigning ourselves to the fact, and finding comfort somewhere in it, makes gratitude that much more magnified.
Crank up the Summit FM and hit the road this summer! You can find The Summit at many events and concerts, all over Northeast Ohio, Athens, and beyond!
Click the logos below to find out more about the wide-ranging events from our community partners:
By Dave Swanson - Summit FM Contributor
To have your debut album not only garner vast critical acclaim, but to also connect with a huge audience is truly something special. The 1989 debut from Tracy Chapman not only brought in rave reviews, three Grammy wins, and four other nominations, but hit #1 in nine countries, and No. 2 in four others, ultimately selling multi-platinum across the world. Not bad for this Cleveland, Ohio born singer/songwriter, who was a mere 24 years old at the time.
In 1989, in the midst of a shallow and sparkly world of pop and metal, Tracy Chapman's debut album seemed like an artifact from a different planet, let alone a different time. Her mixture of folk, reggae, blues, and soul, within the pop format, made Chapman stand out even more. It was because of this distance from the mainstream that people noticed in a big way.
The song that initially got attention focused on her by the record companies was 'Talkin' About A Revolution,' but as we know, it was 'Fast Car,' that when released as the album's first single, would shine the spotlight firmly upon her. The entire album is filled with such mini classics, gems that transcend the time and place they were made, catchy enough to grab an ear, but substantial enough to hold attention. For many, the thought was Tracy was the new social and political voice on the streets, but she saw it differently. "People refer to me as being a protest singer, being revolutionary and all," she told NPR in 1988, "I know the kind of music I do is different than popular music on the radio today, and it’s not new for a black person. Black people have a history of folk music."
Because of, or perhaps in spite of, this take, it certainly helped Chapman gain ground. Songs like 'Mountains O' Things,' and 'Behind The Wall' tackled topics and turned heads lyrically, while the sparse and sometimes haunting musical approach held it all in place. Singing about homelessness, domestic violence, the political stance of America, and a hopeful call for change, may have clashed with the 'nothing but a good time' party going on elsewhere, but it stood tall on its own.
"I think many of the songs I've written, there's an element of hope in there," Chapman told MTV back in 1988. "In a sense I guess it's a double edged sword, let's look at all the things that might be unpleasant, but we have to look at them if we’re going to come up with solutions to these problems, and to do that, you have to hope that things can get better."
The album was produced by the highly respected David Kershenbaum, who was behind many significant records by artists such as Duran Duran, Joe Jackson, Bryan Adams, Supertramp, Cat Stevens, Elkie Brooks, and Tori Amos. In speaking with Rolling Stone at the time of release, Kershenbaum said, "I wanted to make sure that she was in front, vocally and thematically, and that everything was built around her." He was betting that there were enough music fans craving something of more substance and less glitz.
"There was a set of ideas that we wanted to communicate, and we felt if we were truthful and loyal to those ideas, then people would pick up on the emotion and the lyrical content that was there." Kershenbaum's instincts were correct, as the album turned out to be the right album at the right moment.
She definitely touched a nerve with the public on that first album, which lead to a solid twenty year career, mostly dormant since her last album in 2008. Only recently, with the chart topping cover of 'Fast Car,' by current country sensation Luke Combs, is she back in the spotlight. His version hitting #1 caused her to become the first Black woman to score a country number one with a solo composition, while at the 57th Annual CMA's in 2023, she also became the first Black woman to ever take home a CMA Award, winning ‘Song of the Year’ for 'Fast Car.' She later made a public re-emergence when she appeared on the 66th Annual Grammy Awards, earlier this year, to join Combs on 'Fast Car.'
“It’s hard to be a commentator on your own work, and try to analyze what you’ve written, when sometimes you don’t even know what you’ve done,” she told Spin. “That’s why I write songs and I don’t write books. People always want to know about the person that writes, and the easiest thing to do is assume that they write about themselves, and that you can gain insight into what the writer thinks and feels. But that’s not necessarily true. In songs, you take on different personas and different characters, and try and put yourself in their place. Plus, I think that if you go about explaining everything about a song, it’s gone.”
Even though Tracy Chapman has had a healthy career in music, her self-titled debut remains the cornerstone of her catalog for many, and it’s easy to see why it remains essential.
L to R: Mrs. Celeste Wagner, Director of Bands, Barberton High School - Tommy Bruno, General Manager, The Summit FM - Mr. Henry Muren, Principal, Barberton High School
The Summit FM’s Marilyn Stroud Music Alive Program is proud to announce a new partnership with Barberton City Schools. This unique “up-cycling” initiative will provide Barberton students increased access to refurbished musical instruments and music education opportunities.
"We are thrilled to welcome Barberton City Schools as the newest member of our public radio station’s popular Music Alive program," said Tommy Bruno, General Manager at The Summit FM. "Through this collaboration, we aim to inspire a lifelong love of music and ignite creativity among Barberton's students."
Launched in 2008 by The Summit FM (91.3 FM Akron-Canton), the Marilyn Stroud Music Alive Program has donated hundreds of refurbished instruments to regional public schools. As a nonprofit public radio station, The Summit FM believes every child deserves to explore their musical talents and experience the joy of creating music.
"Music education plays a vital role in a well-rounded curriculum," said Jeffrey Ramntyz, Superintendent of Barberton City Schools. "We are grateful for the Summit FM's generosity and commitment to empowering our students through the gift of music."
Barberton City Schools joins other partners such as Akron, Canton, Struthers-Youngstown, and Athens to benefit from the Music Alive program. The Summit FM will work closely with Barberton's staff to coordinate instrument deliveries.
For more information about the Music Alive program, please visit www.summitfm.org/musicalive or contact Tommy Bruno at tommy@thesummit.fm
By Dave Swanson - Summit FM Contributor
Graham Parker has lived a life of music. From his teenage years, following a beat group dream, and on through to gracing the world stage with his own brand of rock and roll, which he merged with soul, folk, and a smart pop sensibility. Parker hit the ground running with his debut LP, 'Howlin' Wind,' in 1976. Produced by Nick Lowe, 'Howlin Wind' was a perfect introduction to the world of Parker and his songs. 'Nothing's Gonna Pull Us Apart,' 'Back To Schooldays,' and 'Don't Ask Me Questions,' to name a few, made people take notice there was a new force to be heard.
Soulful yet savage, Parker was the first kid in line, before Costello, Jackson, and the rest. Melding a bit of Van Morrison with Bob Dylan and his own personal venom, he quickly developed his trademark sound. He would follow that with the slightly more polished, Mutt Lange produced, 'Heat Treatment,' a mere few months later. Two landmark albums under his belt by the end of 1976, and the 'revolution' that was punk rock/new wave had yet to get into gear. Not that GP was 'punk rock,' but like many of the era, that had little to do with the grandiose candelabras and conceptual works of the day, he shared a back to basics sensibility. Graham called Nick Lowe back for album three, 'Stick To Me,' followed by the gritty live album, 'The Parkerilla.'
By 1979, the lay of the land was different in the few years since Parker wandered into the landscape, meaning, the world was catching up with the style GP was laying down, which should have made 1979 the year of Mr. Parker. In some ways, it was. The release of 'Squeezing Out Sparks,' in March of 1979, was perfectly timed. Chock full of classics delivered with a crash, bang, and wallop simply made for the era, Parker was suddenly in the spotlight.
It's not a stretch to claim that it is a perfect album. From the first chord of 'Discovering Japan,' to the final note of 'Don't Get Excited,' the album had everything going for it. The sharp production, by the legendary Jack Nitzsche, was a perfect fit for the first rate songs within. With backing by his loyal, and very rocking band, The Rumour, it honestly didn't get much better. 'Local Girls' was the hit that never was, while 'Nobody Hurts You,' 'Saturday Nite Is Dead,' ‘Passion Is No Ordinary Word,' and 'Love Gets You Twisted,' are all classics that prove Mr. Parker should be on that elusive Mount Rushmore of unsung heroes of rock and roll!
A modest hit in the UK, hitting number 18, 'Squeezing Out Sparks' actually hit the U.S. Top 40, making it, along with the follow-up 'The Up Escalator,' his highest charting U.S. albums. While it never made him a household name, it certainly gained him many new fans, and could easily be held up as Essential! Now, go turn it up and enjoy!
By Matt Anthony - Summit FM Digital Media Specialist
“So, you’re the guy who never responded to any of the tapes I sent to you!?”
We both howled in laughter. It was the first time that I had met Garrett Hart. I was getting a tour of the Ott Building with Jim Chenot, and Garrett came bouncing out of a studio and was immediately called over by Jim.
Not only did Garrett and I share a common bond of grappling in the ‘radio wars’ after long careers, but we were also able to compare notes on a city a couple of hours to the southeast: Pittsburgh. Garrett was a native of the Steel City, and I worked in the ‘Burgh with KDKA radio, from 2001 until 2006. I could detect the recognizable southwest Pennsylvania cadence in his speech.
Leaving the Ott Building after my tour, we also shared an additional chuckle as Garrett easily slid into ‘Pittsburgh-ese,’ comically mocking me as I departed with a ‘Yinz be careful ‘aht there with that winter weather ‘n ‘at. It could be slippy!”
How do we define a ‘body of work?’ What is my body of work? What is yours? It takes no time at all to pore over the massive body of work of, say, The Rolling Stones, or Stephen King, or Martin Scorcese. It’s also easier to access that work. A library gives it to us at a moment’s notice. (and now, naturally, Netflix, Audible, or Spotify!)
Coincidentally, I had been re-arranging some of my things in my home-studio when I heard that Garrett Hart was retiring after 50 years in broadcasting. I sat motionless trying to imagine being involved in something for a half-century. I thought about a person’s body of work, and what it might mean in the scheme of things.
To my right sat an oblong box full of cassette tapes. They included composites and recordings I had saved of past on-air performances, promos that I had voiced, and countless commercials that I had written and produced over the years. Sprinkled around the box were a few CD’s, as well as a couple of rogue DAT tapes, at the time the so-called ‘future’ of audio-archiving. I realized that inside this make-shift modern studio that a cassette player was nowhere to be found. Ha! I couldn’t possibly access this ‘body of work’, even if I wanted to!
I also knew that, unlike Stephen King and Martin Scorcese, my body of work would, more than likely, never be heard again. Nobody would demand a copy of the PM Drive show I did in 1994 at Arrow 94.7, in Washington, D.C. Nobody would ask to read a promo I had written for Opening Day. between the Red Sox and Orioles, for WEEI-FM in Boston. It was as if those decades of work, archived for posterity on those cassettes, served no purpose other than to fill up a box and be left in a dark closet.
But after having the chance to work with Garrett, to be a teammate of his, and to witness his attention to detail and long-time commitment to The Summit FM, I began to understand that a person’s work-life isn’t just a static thing meant to be archived and admired from a distance. It’s a living, breathing thing. It lives on in the people that we touch and the impact that we make.
Garrett’s contribution to broadcasting is immense. While his on-air performances may not be catalogued in a wing of a museum, they honor, in real time, the importance of broadcasting as a medium of expression. The information, humor, and knowledge that he has imparted over this half decade…to listeners, co-workers, employees, members, and underwriters…matters way more than whether it can be accessed on You Tube or in the public library.
The markets where he has worked. The people that benefitted from his knowledge. The companies that profited from his expertise. Heck, just his contributions to KidKam! Radio and Rock and Recovery, alone! All of these hallmarks of an illustrious career are things that everyone can point to when honoring this titan of a broadcaster.
More importantly, though, he understood the role and the mission of this noncommercial public radio entity…AND…he’s just a good guy. Sure, I would have loved to work at WDVE-FM, in Pittsburgh, earlier in my career. I joked with him several times that, as the Program Director of WDVE, he probably erased all those demo-cassettes I had sent him, and re-used them! But I’m grateful that I had a chance to work with this radio broadcasting legend. His body of work is intact, and it’s appreciated and respected.
By Andrew Popp - Attorney
Charitable Giving is something that many of us do, at least in moderation, to support the things we care about. While some of the benefits of donating are obvious, such as supporting the non-profits or charities that you care about, others are more difficult to discover. Additionally, HOW you donate plays a huge role in the way your donation is treated. In this article, we will be giving a brief overview of some of the most common ways to donate as well as the benefits of each. The information contained is for general informational purposes only. You should consult with an attorney or tax professional in making decisions regarding financial matters as these rules change frequently.
Gifting Rules
Before we delve into the realm of Charitable Giving, I think it will be helpful to briefly review the IRS’ regulations about gifting generally. This area of law is seldom understood and, in my presentation, “When Good Gifts Go Bad,” we review some of the common pitfalls people fall into.
Annual Gifts. Every person has the ability to gift a certain amount of money to any other person, charity, or entity of their choosing without tax consequences. This limit is adjusted for inflation periodically and was increased to $18,000.00 in 2024. Note that as a married couple, you can double that figure as you each have that amount to gift. If you go over the annual limit you will likely want to complete a 709 Gift Tax Return with the IRS. This form petitions the IRS to treat the overage as an early inheritance and while it reduces the amount you can eventually pass on to your heirs by the amount of the overage, it means no gift tax is due and payable. Since gift taxes are quite large, and the personal exemptions for inheritances is currently also very high (13.61 million per person).
Straight donation
An outright donation to a charity is probably the most common way in which people give to organizations they care about. While any donations to qualified organizations can be used to reduce your taxable income, other means to donate will allow you to maximize tax benefits while providing flexibility in the long term.
Generally speaking, each individual can subtract charitable donations up to 60 percent of their adjusted gross income when itemizing their income tax deductions. This benefit is a good start, but many families will not donate a large enough amount in order to make itemized deductions worth it when compared to your standard deductions. This option also may leave money on the table and you likely have better options.
Charitable remainder trust.
A Charitable Remainder Trust (“CRT”) is one of the more common ways to support a qualified organization that you care about. As you will see, the numerous benefits of a Charitable Remainder Trust make it clear why.
What is a Charitable Remainder Trust? A Charitable Remainder Trust (“CRT”) can be set up either as a stand-alone Trust, or a sub-trust within a family Trust. It is an irrevocable trust designed to receive funds or assets that will benefit both chosen beneficiaries (such as children) and qualified organizations. A CRT holds those assets and the Trustee manages them. The CRT pays an income to the beneficiaries you choose for up to 20 years. When the time frame for payments has run, any assets left in the CRT are paid to the qualified non-profit or charity of your choosing.
Now for the good part. CRTs are tax-free. What does that mean? In short, CRTs do not pay capital gains or income tax. A common strategy used is to transfer highly appreciated assets into a CRT before they are sold. Where an individual would have to pay tax based on the appreciated value of an asset, a CRT does not. If the assets in the CRT earn an income, again, there is no tax. This has the added benefit of removing assets from your taxable estate at a lesser value.
Keep in mind, however, that when the beneficiary named gets the periodic income payment, that income is taxable and is added to his or her annual income tax return. Even still, this can be a powerful tool in reducing capital gains tax.
In addition to the above, you, as the donor get to claim a charitable deduction, as with a straight donation, in the year in which you create and fund the CRT. (subject to the same limitations above).
Once the payment to the CRT is made it is out of your taxable estate. If the funds grow or appreciate, you would not be taxed on the increased value if your estate would otherwise be subject to gift or inheritance taxes.
Asset Protection. Another benefit of a CRT is that it is beyond the reach of litigants, creditors, or others. (In most cases). That means you can gift an amount to a CRT, receive an income back from the Trust for 20 years and the principal amount cannot be touched by anyone else.
IRA/401K and the SECURE Act.
Additionally, a relatively new benefit of CRTs has come about due to the SECURE ACT. The SECURE ACT went into effect in the year 2020 (SECURE 2.0 at the end of 2022). While this law changed many things, we will be focusing on changes related to IRAs and 401ks. Some changes, like not being required to take required minimum distributions (RMDs) until you are 73 are relatively innocuous, the changes to inherited IRA’s were quite significant.
Elimination of the Stretch IRA
The stretch IRA is a term used to describe payments out of an IRA when it is inherited by a named beneficiary. It works like this, if a beneficiary inherits an IRA from another person, that beneficiary needs to start taking out RMDs regardless of his or her age. The amount of the RMD is typically calculated by looking at the value of the account and the life expectancy of the beneficiary. That beneficiary then can stretch out payments from that IRA over, often times, several decades.
While the stretch is still available to a surviving spouse, or in other very limited circumstances, for most people it is gone. Under the SECURE Act, an inherited IRA now must all be taken out within 10 years, period. In short, that means that larger distributions are required which not only increases taxes on the distributions, but can increase the beneficiary’s tax bracket for income tax.
How does a CRT help? One of the few ways around the required 10 year payout is through a CRT. With a CRT you retain the ability to make payments to a chosen beneficiary for 20 years. This doubles the time for payments and can significantly reduce the tax burdens on the beneficiaries you choose. Additionally, it can serve to extend the protections of the assets in the IRA from any issues your beneficiaries may run into.
Charitable Lead Trust
A Charitable Lead Trust (“CLT”) is similar to a CRT but operates in reverse, and loses some of the tax benefits of a CRT. Unlike a CRT, a CLT pays the income to the charity or qualified non-profit over a term of years. When the time frame for payments has lapsed, any amounts remaining in the trust are paid out to a beneficiary of your choosing (even yourself).
You, as the donor of the CLT, can often receive the same income tax deductions as with an outright donation, or through a CRT. A CLT is not tax-free like a CRT, however. That means income tax and capital gains tax would still need to be paid out of the trust. Taxes on CLTs can be very complicated and a qualified tax professional should be consulted before taking action.
Distributions directly from your IRA/401K
Another option that is often overlooked is the ability to roll over portions of your IRA/401k directly to the qualified non-profit or charity of your choosing. The IRS permits people who have reached the age for RMDs (seventy-three in 2024), to roll over up to $105,000 ($100,00 indexed for inflation), from his or her IRA to such an organization without that donation being counted as taxable income. Even better, that withdrawal, while not counted as taxable income, it DOES count towards your RMDs for the year. That means that if you have a year in which you would be in a higher tax bracket, you can use this technique to satisfy your RMD requirement with the tax consequences you normally see.
Preserving Flexibility in your Charitable Giving
A common concern shared by those who do any type of long-term giving, or those that leave gifts in their Will or Trust, is “What happens if the non-profit or charity goes under?” In short, there are a couple of legal principles that come to the rescue.
The first is a term called cy pres. In non-lawyer speak, cy pres means “as close as possible,” and comes into play for almost any type of charitable gift. If the non-profit or charity you named dissolves the doctrine of cy pres allows the person making the gift to direct those funds to another organization that has a purpose as close to the original organization as possible. This is done to preserve the intent of the original gift giver.
Another option we see used is something called a Donor Advised Fund. A Donor Advised Fund (“DAF”) is a fund established as a public charity. (A section 501(c)(3) organization). A DAF allows you to make a charitable contribution to the Fund and receive that same immediate income tax deduction as we see above. However, the ultimate organization that the donation is given to is not set in stone. The donor retains advisory privileges regarding the distribution of funds. In short, that means you can change the organization that is donated to every year. Moreover, all the funds do not need to be distributed at once. As a charitable organization, if the assets in the Fund grow, they are not taxed. In recent years, Donor Advised Funds have been used as tax shelters by those seeking to avoid properly payable taxes. As such, the IRS is considering additional rules regarding these organizations. Overall, the flexibility and tax benefits should largely be preserved, but the nuances of the law may be subject to change in the future.
Conclusion In sum, charitable giving is a great way to give back and support the community in which we live. However, like many things in law and with taxes, doing it the right way can yield even greater benefits to you. Should we contribute to local non-profits or charities? Absolutely, just make sure you speak with a qualified professional to discuss what best serves you, your family, and even the organization you want to support.