A Simple “Tax-Free” Gift Through Your IRA
Support scholarships for brilliant minds.
Maintain state-of-the-art classrooms and research facilities.
Strengthen our endowment for generations to come.
Use Your Traditional IRA to Make Your Charitable Gifts
Are you at least 70½? The IRA Charitable Rollover provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.
Benefits to You:
- Your gift can total up to $100,000.
- The gift is not included in your gross income for federal income tax purposes.
- The gift can count towards your required minimum distribution for the year from your IRA.
This Gift Is Right for You If:
- You do not need the additional income by your minimum required distribution, OR
- Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR
- You do not itemize deductions, OR
- You are subject to income phase-outs on your income tax deductions.
Do You Qualify?
- You must be 70½ or older at the time of gift.
- Transfers must be made directly from a traditional IRA account by your IRA administrator.
- Funds that are withdrawn by you and then contributed do not qualify.
EXAMPLE
Suppose John wants to make a gift to The Foundation. He has $500,000 in his IRA and he wants the contribution to be $20,000. He can transfer the $20,000 to The Foundation. The $20,000 distributed to The Foundation will not be subject to federal tax and can be counted toward his annual minimum required distribution.
As you plan your required minimum distributions for this year, if you do not need the money the government is requiring you to take, consider using it for a charitable gift with the IRA Charitable Rollover.
The IRA Charitable Rollover allows individuals age 70½ and older to make direct transfers totaling up to $100,000 per year to 501(c)(3) charities, without having to count the transfers as income for federal income tax purposes.
- Who qualifies?
- How much can I transfer?
- From what accounts
can I make transfers? - To what charities
can I make gifts? - Can I fund life income gifts?
- How will you count my gift?
- Who qualifies?
- What are the tax
implications to me? - Does this transfer qualify as
my required minimum distribution? - Can my spouse also make one?
- How do I know if an IRA Charitable Rollover
is right for me? - What is the procedure to execute
an IRA Charitable Rollover?
Individuals who are age 70½ or older at the time of the contribution (you have to wait until 6 months after your 70th birthday to make the transfer).
Up to $100,000 per year. The provision does not have an expiration date.
Transfers must come from your IRAs directly to us.
If you have retirement assets in a 401k, 403b etc., you must first roll those funds into an IRA, and then you can direct the IRA administrator to transfer the funds from the IRA directly to The Foundation.
Tax exempt organizations that are classified as 501(c) (3) charities, including The Foundation, to which deductible contributions can be made.
You can not use the IRA Charitable Rollover to fund life-income gifts such as charitable gift annuities, charitable remainder trusts, or pooled income funds. You also cannot fund donor advised funds or supporting organizations.
We will give you full credit for the entire gift amount.
Individuals who are age 70½ or older at the time of the contribution (you have to wait until 6 months after your 70th birthday to make the transfer).
Federal
You do not recognize the transfer to The Foundation as income, provided it goes directly from the IRA administrator to us; therefore, you are not entitled to an income tax charitable deduction for your gift.
State
Each state has different laws, so you will need to consult with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal income or federal tax paid. Still other states have no income tax at all.
Once you reach age 70½, you are required to take required minimum distributions from your retirement plans each year, according to a federal formula. IRA Charitable Rollovers count towards your minimum required distribution from the IRA for the year.
Yes, every individual can use the IRA Charitable Rollover for up to $100,000 each year, even if you are married and file jointly.
You are at least age 70½, and:
You do not need the additional income necessitated by your minimum required distribution, OR
Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR
You do not itemize deductions, OR
You are subject to income phase-outs on your income tax deductions.
We offer a sample letter you can send to your plan provider to initiate a rollover. Make sure that you contact us when you direct the rollover so we can look for the check from your IRA administrator.
Important: Be sure to check with your financial advisor to determine whether this provision is right for you.
This information is not meant as tax or legal advice.
Interested?
Contact The Foundation today for more information on the
IRA Rollover and to receive a free estate planning guide.
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