IRA CHARITABLE ROLLOVER FACT SHEET
The IRA Rollover allows people age 70½ and older to make direct transfers totaling up to $100,000 per year to qualified charities, without having to count the transfers as income for federal income tax purposes. Transfers must come from your IRA directly to the qualified charity. If you have retirement assets in a 401k, 403b etc., you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to the charity.
Frequently Asked Questions:
Here are answers to some frequently asked questions about IRA Charitable Rollover gifts.
Q: To what charities can I make IRA Charitable Rollover gifts?
A: Charitable IRA Rollover gifts must be directed to tax exempt organizations that are classified as 501(c)(3) charities, such as OperaDelaware.
Q: Can I make a IRA Charitable Rollover gift to my donoradvised fund?
A: Donor-advised funds and supporting organizations are not eligible for IRA Charitable Rollover gifts.
Q: Can I use the IRA Rollover to fund life-income gifts such as charitable gift annuities, charitable remainder trusts, etc.?
A: No, these are not eligible.
Q: What are the tax implications for me?
A: The transfer to the charity does not count as income for federal tax purposes and is not taxed as such, provided it goes directly from the IRA provider to the charity. However, you are not entitled to an income tax charitable deduction for your gift.
Q: Does this transfer qualify as my minimum required distribution?
A: Yes, IRA Charitable Rollover gifts do count towards the minimum distributions required for people who have reached age 70½.
Q: What is the procedure to execute an IRA Charitable Rollover?
A: Contact your plan provider to learn their procedures. We also offer a sample letter you can send to your plan provider to initiate an IRA Charitable Rollover gift to OperaDelaware. Make sure that you contact us when you direct the rollover so we can look for the check from your plan provider.
Q: Who can benefit from an IRA Charitable Rollover?
A: IRA Charitable Rollover gifts are an excellent option for you if any of these apply to you:
You are already making charitable contributions at your deduction limit, but want to do more.
Your income level causes the phase out of your exemptions or itemized deductions
You do not itemize deductions.
Additional income from your required IRA withdrawals will cause more of your Social Security income to be taxed.
You wish to remove up to $100,000 from your taxable estate.
You would like to avoid the possibility that the government will impose taxes of up to 60% on IRA funds not distributed during your lifetime.