We do not normally recommend IRA, 401(k) or other qualified plans (other than 412(i) and 419A plans) for Ministers, Rabbis and Ordained Leaders the following reasons.

• Larger amounts may be placed into a CSO than into qualified accounts.
• Growth and income are not taxed.
• The donor may borrow the funds without penalty or tax consequences
• The CSO may invest in your business without creating penalties or taxes liabilities
• Balances remaining in CSO at death are not subject to estate taxes, but may provide economic benefit to heirs
• CSOs may pay wages (which would be ordinary income, but so would the withdrawals from qualified accounts be taxable).
• There is no schedule for withdrawals from a CSO.  Qualified accounts impose both early and delayed withdrawal penalties.
• The donor may conduct business with the CSO, but not with his qualified accounts.
• The CSO will generally have greater flexibility in investing its funds than are available to most holders of qualified accounts.
• The CSO has better asset protection than qualified accounts which are subject to seizure by IRS

The advantages of qualified accounts over a CSO are very limited

• Contributions to a CSO are deducted from adjusted gross income, not in determining adjusted gross income.   This difference will likely mean very little to most.
• Employer contributions or matching is unlikely with a CSO.   However, the "C" corporation owned by the donor may make charitable contributions to the donor's CSO in addition to the donations made by the donor from personal funds.

If you have substantial funds in qualified accounts, please contact us immediately.  We will show you how to convert those funds into a tax-free retirement income, or how to use them to generate an asset-protected tax-free estate for your heirs.