Overview
There's good news for individuals ages 70½ or older who have individual retirement accounts. Thanks to the extended charitable IRA legislation, you can once again make outright gifts using traditional or Roth IRA funds without tax complications!
If you are required to receive minimum distributions from your IRA and you do not need the money for personal use, consider using those funds as a charitable gift. While you cannot claim a charitable deduction for the IRA gifts, you will not pay income tax on the amount.
You may take advantage of this type of gift if:
- You are age 70½ or older
- Your IRA gifts total $100,000 or less each year in 2008 and 2009
- You transfer funds directly from an IRA
- You transfer the gifts outright to one or more public charities
The Benefits
- In most cases, the transfer counts toward your minimum required distributions.
- The gift generates neither taxable income nor a tax deduction, so even those who do not itemize their tax returns receive the benefit.
- You may transfer up to $100,000 each year directly from your IRA.
- The distributions may be in addition to, or fulfill, any charitable giving you have already planned.
Reminder
- The rollover is for outright gifts only, and not for charitable remainder trusts or charitable gift annuities.
- Distributions to private foundations, donor advised funds, or supporting organizations do not qualify.
The Next Step
Contact your tax adviser(s) and your IRA administrator if you are considering this type of gift. You can also contact the Office of Gift Planning at (800) 226-4438 or email plannedgiftinfo@ngs.org with any questions.
