Rolling Over an IRA into a Charitable Fund
April 7, 2017
For those aged 70½ or older, it's possible to make tax-favored charitable gifts from traditional and Roth IRA accounts.
in 2016, legislation passed that makes the charitable IRA rollover provision permanent. Up to $100,000 can be transferred directly from traditional or Roth IRAs to one or more qualified charities such as The Community Foundation, free from federal income tax each year. Amounts given in this way count toward required IRA minimum withdrawal amounts for the year of the gift.
A donor may direct The Community Foundation to use an IRA withdrawal gift for maximum community benefit. A variety of giving vehicles exist: The Youth in Philanthropy Fund and the Community Fund are attractive examples of suitable opportunities.
Customized opportunities are also available: income tax-free charitable rollovers may be directed to a new or an existing named Designated Fund or Field of Interest Fund. (Note that gifts made to a donor advised fund do not qualify for special tax treatment.)
To maximize this opportunity, it's important not to withdraw funds prior to making your gift. Instead have the gift amount distributed directly from an IRA to your chosen qualified charity. For those with check writing privileges on their accounts, this may be the most efficient way to make gifts directly from an IRA.
Click here for three simple ways to initiate your IRA transfer to The Community Foundation, including a sample letter to send to your IRA plan administrator. Contact us, or your IRA administrator or tax advisor for more information.
Teri McNally, Executive Director
Have any questions about the IRA charitable rollover? Check out the Council on Foundation's Frequently Asked Questions.