Thou Shalt Not …

Since IRAs and retirement plans typically are funded with pre-tax income, withdrawals are considered taxable income to the account owner. Further, with commercial annuities and savings bonds, any appreciation over the original cost basis is also considered taxable income when withdrawn or cashed.

Moreover, unlike gifts of appreciated securities where the long-term capital gain is avoided when given to charity, if these assets are used to fund a lifetime gift, the taxable event is unavoidable. When a donor uses these assets to make a lifetime charitable gift, he still pays income tax, even if the asset is given to charity.