Take Advantage of the IRA Charitable Rollover for This Tax Year

Posted December 2017

The IRA charitable rollover has become one of the most popular ways to make gifts to charity, and many donors make IRA gifts in December as part of their year-end strategy to reduce taxes for the year. The availability of the rollover used to be up in the air from year to year—with Congress sometimes giving approval at the “stroke of midnight”—so donors had to wait until year-end to make a gift via the rollover. But now it is a permanent fixture in tax law, so you don’t have to wait until the 11th hour.

To take advantage of this wonderful giving opportunity, you must be at least 70½ years of age—the age at which you are required to begin taking distributions from your IRA (even if you don’t need the money). You can join other supporters who are benefiting us and avoiding paying income tax on the distribution by transferring up to $100,000 free of tax directly from your IRA.

Is this the right gift for you to make? Yes, if some or all of the following are true:

  • You do not need all of the required distribution from your IRA; you can benefit because the transfer will count toward your minimum distribution requirement.
  • You live in a state where a charitable deduction is not allowed for state tax purposes.
  • You do not itemize; you can make a gift without the amount of the gift included as taxable income.
  • You have, or would like to make, contributions in excess of the annual 50 percent limitation on deductibility for charitable contributions.
  • Your major liquid asset is your IRA.
  • You have an enforceable charitable pledge; you can use the transfer to satisfy your pledge to us without violating the rules against self-dealing.

What are the requirements and restrictions for making this gift?

  • You must be 70½ years of age or older.
  • The gift must be made directly from the IRA to our organization.
  • Gifts cannot exceed a total of $100,000 for the year.
  • Gifts must be outright.
  • Gifts cannot be made to a donor advised fund, to a supporting organization, or to fund a charitable life-income agreement.
  • The gift is not included in taxable income, and therefore no income-tax charitable deduction is allowed.
  • The gift can be made only from an IRA; rollover gifts are not permitted from a 401(k), 403(b), or 457 plan.

What steps should you take to make a gift?

  • Contact your IRA custodian right away for directions on how to initiate the transfer to us.
  • Contact our office about your gift and for any other assistance we may be able to provide in requesting the transfer and completing the gift.
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