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IRA Charitable Rollover

In these challenging economic times, there is some good financial news for you and for Saint Mary-of-the-Woods College: the recently signed Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 includes an extension of the IRA Charitable Rollover. You may want to consider this tax-advantaged method of maintaining your charitable giving.

If you gift your minimum required distribution (or more) from a traditional or Roth IRA directly to Saint Mary-of-the-Woods College, you can avoid paying income tax on up to $100,000 of the distribution. Here are the details:

  • The donor must be age 70.5 at the time of transfer to ensure favorable tax treatment for that tax year.
  • The transfer is limited to $100,000 per tax year (2010 and 2011) and per spouse, if the spouse has a separate IRA account.
  • The transfer is not limited to 50% of adjusted gross income (AGI) like other cash gifts.
  • The act applies only to traditional, rollover, and Roth IRAs. However, funds from other types of retirement plans may be rolled into a traditional IRA in order to make the gift.
  • The transfer must pass directly from the IRA custodian to the qualifying charity.
  • The transfer cannot be made to a donor-advised fund or a supporting organization.
  • The transfer cannot be used to fund a charitable gift annuity or a charitable remainder trust.

Who might benefit from this limited-time giving opportunity?

  • Those who will reach age 70.5 by the time of the gift transfer
  • Those who currently do not itemize deductions
  • Those whose charitable deductions are maxed out
  • Those subject to both income and estate tax if their IRA is left to heirs
  • Those subject to mandatory withdrawal

How do I make my gifts to Saint Mary-of-the-Woods College through a qualified IRA distribution?

Contact your retirement plan custodian well before the December 31 deadline to learn how to initiate the transfer. Instruct the plan custodian to make a qualified charitable distribution directly to SMWC utilizing this sample IRA plan custodian letter. The check or distribution proceeds should not come to you.

A gift of this nature will receive full credit toward the donor’s Class Gift Campaign. To learn more, please contact April Simma, director of Major and Planned Gifts, by calling 888-769-0013 or email asimma@smwc.edu. We would be happy to assist you with the rollover or offer other creative ways to craft a gift that is both good for you and good for Saint Mary-of-the-Woods College.

Thank you for your loyalty and support.