IRA Charitable Rollover
The Charitable IRA Rollover is Back! On January 1, 2013, President Obama signed the American Taxpayer Relief Act of 2012. Under the Act, Congress has extended tax-free gifts from Individual Retirement Accounts (IRAs) through 2013.
Don't Miss Your Chance: Make Tax-Free Gifts From Your IRA Today!
The IRA charitable rollover legislation allows you to transfer lifetime gifts up to $100,000 using funds from your individual retirement account (IRA) without undesirable tax effects.
You may contribute funds this way if:
- You are age 70½ or older at the time of the gift.
- You transfer up to $100,000 directly from your IRA. This opportunity applies only to IRAs and not other types of retirement plans.
- You transfer the funds outright to one or more qualified charities. The legislation does not permit direct transfers to charitable trusts, donor advised funds, charitable gift annuities or supporting organizations.
- You make your gift by Dec. 31, 2013.
Q. I've already named your organization as the beneficiary of my IRA. What are the benefits if I make a gift now instead of after my lifetime?
A. By making a gift this year of up to $100,000 from your IRA, you can see your philanthropic dollars at work. You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have already made by transferring that amount from your IRA under this legislation as long as it is $100,000 or less for the year.
Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to reach age 70½ by the date you make the gift.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. Under the legislation, gifts can be made from IRAs. Pension, profit sharing, 401(k), 403(b) and other forms of retirement funds do not fall under this tax legislation.
Q. Can my gift be used as my minimum required distribution under the law?
A. Yes, absolutely. If you have not yet taken your required minimum distribution, the charitable IRA rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.
Q. Do I need to give my entire IRA to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your IRA is valued at more than $100,000, you can transfer a portion of it to fund a charitable gift.
Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of $100,000. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
Q. My spouse and I would like to give more than $100,000. How can we do that?
A. If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA.
As in all estate planning and donations of significant size, it is best to confir with your tax advisor when considering such a donation to OURF or any other qualified charity.