IRA Charitable Rollover

IRA Charitable Rollover—A Great Way to Give!

 

Don’t Miss This Opportunity

Last year in 2015, Congress permanently reinstated legislation that allows you to make a tax-free gift from your IRA. This is known as an IRA charitable rollover. The law has been made permanent enabling eligible individuals (those 70 ½ and older) to make annual gifts from your IRA now and into the future.

If you have been waiting to make your IRA transfer, you must act quickly to take advantage of this opportunity if you would like your gift to qualify in 2016.

There’s Still Time for 2016
This law allows individuals 70½ and older the ability to transfer up to $100,000 from their individual retirement accounts to a qualified charitable organization (such as Sarcoma Foundation of America) without being subject to income taxes on the distribution. Transfers will need to be made by Dec. 30, 2016 (the last business day of the year), if you would like your gift to qualify this year.

You may contribute funds this way if:

  • You are age 70½ or older at the time of the gift.
  • You make your gift in 2016.
  • You transfer any amount up to $100,000 directly from your IRA. This opportunity applies only to IRAs –not other retirement plans.
  • You transfer the funds outright to one or more qualified charities. (Sarcoma Foundation of America is a qualified charity as a 501c3 nonprofit organization.)

Questions About the IRA Charitable Rollover

I’ve already named Sarcoma Foundation of America as the beneficiary of my IRA. What are the benefits if I make a gift now instead of after my lifetime?
By making a gift this year of up to $100,000 from your IRA, you can see your gift at work. You are jump-starting the legacy you would like to leave and seeing its impact in your lifetime.

I’m turning age 70½ in a few months. Can I make this gift now?
No. The legislation requires you to reach age 70½ by the date you make the gift. Please consider this way to make a gift when you reach this age or older.

My spouse and I would like to give more than $100,000. How can we do that?
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.

I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
Yes. Direct rollovers to a qualified charity can only be made from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to Sarcoma Foundation of America. To determine if a rollover to an IRA is available for your plan, speak with your plan administrator.

Can my gift be used as my minimum required distribution under the law?
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.

Do I need to give my entire IRA to be eligible for the tax benefits?
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.

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.

If considering this type of gift, please consult a tax or financial advisor.

Please feel free to contact our Development Director, Michele Levy, CFRE at 301-253-8687 with any questions.

The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.

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