IRA Charitable Rollover
The worst estate planning mistake you can make is sending the wrong assets to family, incurring large estate tax bills.
Let our Planned Giving team help you avoid this costly mistake.
You may be looking for a way to make a big difference to sustain or maybe even expand Focus on the Family's mission. If you are 70½ or older, an IRA charitable rollover is an excellent way to partner with Focus on the Family!
Benefits of an IRA charitable rollover
- Avoid taxes on transfers of up to $100,000 from your IRA to our Focus on the Family
- Satisfy your required minimum distribution (RMD) for the year
- Reduce your taxable income, even if you do not itemize deductions
- Make a gift that is not subject to the 50% deduction limits on charitable gifts
- Help further the work and mission of Focus on the Family
How an IRA charitable rollover gift works
- Contact your IRA plan administrator to make a gift from your IRA to Focus on the Family.
- Have your name included on memo line or stub of the check.
- Your IRA funds will be mailed directly to Focus on the Family.
Checks can be mailed to:
Focus on the Family Attn: Gift & Estate Planning, 8605 Explorer Drive, Colorado Springs, CO 80920
On December 18, 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015 ("PATH Act") which, among other tax extenders, retroactively extended what is commonly known as the "Charitable IRA Rollover" opportunity for 2015 and also removed what has become an annual ambiguity by making it a permanent IRA giving opportunity for future years to come.
Q: What kinds of retirement plans qualify under this provision?
A: The provision applies only to traditional IRAs and Roth IRAs. Other employer-sponsored qualified plans, such as 401(k), 403(b), profit sharing, Keoghs,*SEPs and *SIMPLE plans are not eligible.
Q: Is there any age requirement for the plan owner who wishes to take advantage of this exclusion?
A: The tax exclusion applies to plan owners who are at least 70 1/2 years of age at the time of the charitable distribution.
Q: Is there a limitation on the amount of the charitable distribution?
A: The exclusion amount is limited to $100,000 per year, per plan owner. Thus, a married couple who both own IRAs could make a qualified charitable contribution of $200,000 in a single tax year.
Q: Can a distribution be made to any charity or non-profit organization to qualify for the exclusion?
A: To qualify for the exclusion the distribution must be made directly to a public charity (donor advised funds, supporting organizations, and private foundations do not qualify).
Q: Can a donor fund a gift annuity with the IRA charitable distribution?
A: No. Split interest gifts do not qualify, nor do any gifts in which a donor receives a benefit of value other than intangible ones.
Q: How is the distribution made so the donor will avoid a tax penalty?
A: The best way is for a donor to authorize his or her IRA plan administrator to make the distribution payable directly to the charity. Accordingly, it's important that the plan administrator provides the charity with information about both the donor and the charitable gift so that the charity can present the donor with a letter of acknowledgement. Without this substantiation, the exclusion is not available.
Please keep in mind that the general information contained in this article is not intended as a substitute for professional financial planning or tax advice. For this reason, we strongly recommend you discuss your particular circumstances with your tax or financial professional. If you wish to discuss the IRA charitable rollover at greater length, or if you wish to inquire about other creative giving opportunities, please call Focus on the Family's Gift & Estate Planning team at 800/782-8227.
*Some exceptions may apply for retired individuals who are no longer actively contributing to the plan.
If you have any questions about an IRA charitable rollover gift, please contact us. We would be happy to assist you and answer any questions you might have.