Make Tax-Free Gifts From Your IRA Today!
The IRA charitable rollover legislation allows you to transfer gifts up to $100,000 annually using funds from your individual retirement account (IRA) without undesirable tax effects.
You may contribute funds this way if:
- You are age 70½ or older at the time of the gift.
- You transfer up to $100,000 directly from your IRA. This opportunity applies only to IRAs and not other types of retirement plans.
- You transfer the funds outright to one or more qualified charities. The legislation does not permit direct transfers to charitable trusts, donor advised funds, charitable gift annuities or supporting organizations.
- You make your gift by December 31st
Q. Can my gift be used as my minimum required distribution under the law?
A. 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.
Q. Do I need to give my entire IRA to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year.
Q. 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 each 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.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. Direct rollovers to a qualified charity can only be made from an IRA. If you have a pension, profit sharing, 401(k) or 403(b) plan, you must first roll over all or a portion of that plan to an IRA. You can then use the funds from the IRA to complete the direct IRA rollover to qualified charity. To determine if a rollover to an IRA is available for your plan, speak with your plan administrator.
Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to reach age 70½ by the date of your gift.
Q. Can I fulfill a current pledge with my IRA Rollover Gift?
A. Yes, you can fulfill any outstanding pledge you may have already made by transferring funds from your IRA under this legislation, as long as it is $100,000 or less for the year.
Q. My spouse and I would like to give more than $100,000. How can we do that?
A. 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.
It is wise to consult with your tax professionals if you are contemplating a charitable gift using an IRA Rollover option. Please feel free to contact Don Ireland-Schunicht or Caleb Hegna with any questions.
Caleb A. Hegna
Legal Name: Iowa Health Foundation, d/b/a UnityPoint Health-Des Moines Foundation
Address: 1415 Woodland Avenue, Suite E200; Des Moines, IA 50309
Federal Tax ID Number: 42-1467682