The Charitable Individual Retirement Account (IRA) Rollover has become a popular philanthropic vehicle in recent years because of its many benefits to donors and charities alike.
However, the Charitable IRA Rollover provision expires on December 31, 2011! Individuals interested in this giving vehicle must act before the end of the year.
What is the Charitable IRA Rollover?
The Charitable IRA Rollover was first enacted in 2006 as part of the Pension Protection Act, which allowed individuals aged 70 ½ and older to contribute up to $100,000 from their IRA to charities without having to count the distributions as income. In 2010, the provision was renewed until the end of this year.
What are the beneἀts of a Charitable IRA Rollover?
A Charitable IRA Rollover allows individuals to make a signiḀcant gift to charitable organizations, like Junior Blind, and enjoy tax beneḀts at the same time. This opportunity may be right for you, if:
- You use the standard deduction instead of itemizing deductions.
- You have already contributed as much to your IRA as you can currently deduct.
- You do not need the minimum distribution you are required to take from your IRA.
- You already planned to leave a gift to Junior Blind upon your passing.
- You would like to increase your annual gift to Junior Blind and reduce your tax obligations.
What are the qualiἀcations for a Charitable IRA Rollover?
There are some simple rules that must be followed in order to take advantage of this provision:
- You must own a traditional or Roth IRA and be at least 70 ½ years old when the gift is transferred.
- Total gifts cannot exceed $100,000 per IRA owner or beneficiary, per year. If you have a spouse, you can each contribute up to $100,000 per year.
- Gifts must be made directly from your IRA to a public charity, like Junior Blind, and cannot be made to a donor advised fund, such as a private foundation.
- Gifts must be made to the charity outright. they cannot be used to fund a charitable remainder trust or establish a charitable gift annuity.
- Only the IRA administrator can transfer gifts to the public charity. If the IRA owner withdraws funds and then contributes to the charity, the amount of the funds withdrawn will be included in the donor's gross income and thus be subject to income tax.
What if I want to include Junior Blind in my plans, but a Charitable IRA Rollover is not for me?
If making a gift from your IRA is not right for you, consider making Junior Blind the beneficiary of your IRA or other retirement assets. In most cases, income taxes on funds contributed to your IRA are deferred and, therefore, subject to income and estate taxes for your heirs upon your passing—which may account for 70% of the IRA value.
Naming a charitable organization, like Junior Blind, as a beneficiary, makes the entire amount designated exempt from taxes. As a result, your heirs may inherit more assets and pay less in taxes. And, you will leave a lasting legacy of hope for the children of Junior Blind
If you would like further information about how a Charitable IRA Rollover may beneἀt you or have questions about the information in this article, please call Bonnie E. Harris at (323) 290-6294 or email her at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Please visit our website for other creative giving opportunities, such as making a bequest or establishing a Charitable Gift Annuity, at www.juniorblind.org.
Please consult a qualified legal or financial professional when considering your end-of-year giving or your estate planning.
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