Give Out of Your IRA

TIME IS RUNNING OUT!

Normally, the Internal Revenue Service considers the required minimum distribution from your IRA as 100% taxable gross income. In October of 2008, however, Congress passed the Emergency Economic Stabilization Act. As part of this Act, IRA owners age 70 ½ and older can make donations to qualified charities, like the American Liver Foundation, of up to $100,000 a year without claiming any increased income or paying additional taxes. Your charitable donation allows you to avoid paying federal income tax on your minimum distribution while fulfilling its requirement. Here are the details:

  • The Act is retroactive to 1/01/08 and applies to gifts made from that date through 12/31/11.
  • Donor must be 70 ½ or older.
  • The maximum gift from an IRA rollover is $100,000 per year and no separate charitable deduction is allowed.
  • 100% of the gift must go directly to charity (no planned gifts, including Charitable Annuities) and it can not be transferred to your donor advised fund.
  • Only your IRA trustee may transfer the gift to the charity. If you withdraw the funds and then contribute them to charity, the IRS will consider it taxable income. Distribution checks should be issued in the name of the charity, not the account holder.
  • Check with your legal and/or financial advisor if you have further questions.

Sample Letter to Your IRA Administrator

Refer to this document if you are interested in asking your IRA administrator to donate to American Liver Foundation out of your IRA.

 

 

This page was created June 9, 2015.