IRA Charitable Rollover

On December 18, 2015, legislation was passed permanently extending the Charitable IRA allowing Americans age 70½ and older to transfer up to $100,000 per year from IRAs to charity—without incurring federal income taxes today or estate and income taxes in the future. If married, each spouse can transfer up to $100,000 from his or her IRA annually.

To help you help your clients, we’ve highlighted some important points regarding this new legislation:

  • IRA contributions can be made to any tax exempt 501(c)(3) organization, including the Community Foundation. For example, a contribution can be made to our Philanthropic Leadership Fund, which helps expand the impact of giving throughout the state. There are many other options, so we invite you to contact us to discuss your clients’ needs.
  • Gifts to donor advised funds, split-interest gifts like CGAs and CRTs, supporting organizations, and private foundations do not qualify for this federal tax exemption.
  • However, field of interest funds, unrestricted funds, and/or designated funds are eligible for the IRA contributions.
  • There may also be state income tax savings.
  • Transfers must come directly from the IRA to the qualified charity.
  • Your clients may be interested in this charitable opportunity if they:

> Have excess retirement savings.
> Are subject to a 50 percent of income charitable deduction limitation.
> Take the standard deduction on their tax return.
> Accept minimum distributions from an IRA and have alternative sources of income.
> Are planning to leave a charitable legacy through an estate plan.
> Have designated a favorite charity as beneficiary of retirement assets.
> Care about the community and want to know their gifts will make a difference.

Download our worksheet to help your clients explore whether this IRA rollover option is right for them.