IRA Charitable Rollover


IRA Charitable Rollover

The IRA Charitable Rollover provision has been made permanent by Congress!  Rollover gifts must be completed by 12/31 to count for the current tax year.

IRA Charitable Rollover Basics
The IRA Rollover allows people age 70½ and older to make direct transfers totaling up to $100,000 per year to qualified charities, without having to count the transfers as income for federal income tax purposes.

Transfers must come from your IRA directly to the qualified charity. If you have retirement assets in a 401k, 403b etc., you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to the charity.

Frequently Asked Questions
Here are answers to some frequently asked questions about IRA Charitable Rollover gifts.

Q: To what charities can I make IRA Charitable Rollover gifts?
A: Charitable IRA Rollover gifts must be directed to tax exempt organizations that are classified as 501(c)(3) charities, such as the Chester County Community Foundation.

Q: Can I make an IRA Charitable Rollover gift to my donor advised fund?
A: Donor-advised funds and supporting organizations are not eligible for IRA Charitable Rollover gifts. Other funds at CCCF are eligible for these gifts, including the Fund for Chester County Grantmaking Fund, Lincoln Building Preservation Fund, Philanthropy Learning-Action-Network, Friends of the Community Foundation Fund, the Community Foundation’s Operating Endowment and each of the Foundation’s nonprofit-designated endowment funds and field of interest funds.  Please contact Donor Services to discuss options.

Q: Can I use the IRA Rollover to fund life-income gifts such as charitable gift annuities, charitable remainder trusts, etc.?
A: No, sorry, these are not eligible

Q: What are the tax implications for me?
A: The transfer to the charity does not count as income for federal tax purposes and is not taxed as such, provided it goes directly from the IRA provider to the charity. However, you are not entitled to an income tax charitable deduction for your gift.

Q: Does this transfer qualify as my minimum required distribution?
A: Yes, IRA Charitable Rollover gifts do count towards the minimum distributions required for people who have reached age 70½.

Q: What is the procedure to execute an IRA Charitable Rollover?
A: Contact your plan provider to learn their procedures. We also offer a sample letter (below) you can send to your plan provider to initiate an IRA Charitable Rollover gift to CCCF. Make sure that you contact us when you direct the rollover so we can track the check from your plan provider.

Q: Who can benefit from an IRA Charitable Rollover?
A: IRA Charitable Rollover gifts are an excellent option for you if any of these apply to you:

  • Are already making charitable contributions at your deduction limit, but want to do more.
  • Your income level causes the phase out of your exemptions or itemized deductions (limitations reinstated January 1, 2013.)
  • You do not itemize deductions.
  • Additional income from your required IRA withdrawals will cause more of your Social Security income to be taxed.
  • You wish to remove up to $100,000 from your taxable estate.
  • You would like to avoid the possibility that the government will impose taxes of up to 60% on IRA funds not distributed during your lifetime.

 

To find out more, please contact the Community Foundation’s VP for Donor Services:

Beth Harper Briglia, CPA, CAP

(610) 696-8045

beth@chescocf.org

 

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Date

name

address

city, state zip

 

IRA administrator’s name

Org

Address

City, state  zip

RE: IRA rollover gift

Dear                                                       ,
Federal legislation now permits a rollover directly from an IRA to a qualified public charity.  As the owner of IRA account #_________________ that is in the custody of your organization, I request that you transfer from that account the sum of $_________________ to the Chester County Community Foundation, 28 West Market Street, West Chester PA 19382.  The Treasury Tax ID Number for the Chester County Community Foundation is 23-2773822.

It is my intention to make a Qualified Charitable Distribution (QCD) to this charity from my IRA, which may fulfill part or all of my IRA required minimum distribution for this year. This letter is sufficient authorization for you to make this QCD gift. However, if you require any further documents, please promptly send or preferably email those to me.

 

Thank you for your assistance with this matter.
Cordially yours,

Your name

Phone number

E-mail