The IRA Charitable Rollover – A Tax-Wise Way to Make a Gift

A tax incentive known as the IRA Charitable Rollover enables our friends to support Guiding Eyes through a tax-free withdrawal of any amount up to $100,000 from an individual retirement account (“IRA”), if the withdrawal is transferred directly to our organization.

Last year, Congress passed legislation extending the IRA charitable rollover indefinitely.  Please read on for more details, and remember, if you wish to take advantage of the benefits of the IRA Charitable Rollover for the 2016 tax year, your gift must be complete by December 31, 2016.

IMPORTANT QUESTIONS ABOUT THE IRA CHARITABLE ROLLOVER

Who is eligible? Any limits on the gift? Those 70 ½ or over at the time of the gift can give total rollover gifts of no more than $100,000 by acting before year end – that is, by December 31 of each tax year.

Do all types of retirement plans qualify? Only traditional and Roth IRAs are eligible. Assets in other types of retirement accounts, such as 401(k)s, 403(b)s, etc., must first be “rolled over” into an IRA before they are contributed directly to charity.

Can a supporter write a personal check to Guiding Eyes for the Blind after having received a distribution? No. The distribution must be made directly by the IRA administrator or trustee to Guiding Eyes.

Can IRA Charitable Rollovers be used to fund life-income gifts, such as charitable gift annuities? Right, now, “rollovers” apply only to outright gifts, not life income gifts, such as charitable gift annuities and charitable remainder trusts.  Rollovers can, however, be used for gifts “in memory or in honor of,” or gifts to be recognized by a plaque in the name of the donor or another.

What About Required Minimum Distributions? Amounts transferred to Guiding Eyes as an IRA Charitable Rollover count toward minimum distribution requirements.

Is the gift tax deductible? No deduction is available because the IRA withdrawal is not reported as income.

Who would benefit from an IRA Charitable Rollover? Friends 70 ½ or older who do not need all of the income from their IRA, and who:

• Do not itemize their deductions. But for the rollover provision, non-itemizers would count the IRA distribution as income, but would not be able to claim an offsetting charitable deduction.

• Itemize, but cannot fully deduct their charitable gifts because they have reached applicable charitable deduction ceilings, or their itemized deductions are subject to reduction.

For more information, please contact Gail Resnikoff, Director of Planned Giving at 914-234-2237 (800-942-0149, toll-free) or gresnikoff@guidingeyes.org. The Guiding Eyes community thanks you for your support.

The foregoing is intended to convey general information only, and does not constitute legal, tax, or financial advice. We strongly suggest that you consult with your professional advisors before making a charitable gift.