IRA Charitable Rollover
The IRA charitable rollover provision is back!
The American Taxpayer Relief Act of 2012 includes an amendment that makes it possible for eligible persons to make tax-free distributions from their IRA accounts -- up to $100,000 -- to charitable organizations before February 1, 2013, and have them apply for the 2012 tax year. In addition, eligible persons can also make up to $100,000 in tax-free distributions from their IRA accounts by December 31, 2013, for the 2013 tax year.
Charitable Rollover Details
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 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 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 firstname.lastname@example.org. 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.