The IRA Charitable Rollover Keeps Rolling – Even After Tax Reform

Did you know that the IRA Charitable Transfer benefits donors 70 ½ and up?

The IRA Charitable Transfer (Qualified Charitable Distribution (QCD) is an excellent way to make gifts and receive tax benefits in return. As you plan your required minimum distribution (RMD) for 2018, consider using your IRA account to make the most of your charitable giving. You will receive a tax benefit even if you take the standard deduction! It’s important to consider your tax situation before deciding whether to make a charitable contribution from your IRA. Be sure to share this gift plan with your advisors.

To Qualify:

  • You must be 70 ½ or older at the time of the gift.
  • The transfer must be made directly from a traditional IRA account by your IRA Administrator to EWTN.
  • Gifts must be outright.
  • Distributions to Donor Advised Funds or life income arrangements such as Charitable Remainder Trusts and Charitable Gift Annuities do not qualify.
  • Gifts from 401ks, 403b, SEP and other plans do not quality. Ask your financial advisor if it would be right for you to create a traditional IRA account so you can benefit from the IRA Charitable Transfer.

Benefits

  • Donate up to $100,000 annually.
  • Qualified IRA Charitable Transfers are excluded from gross income for federal tax purposes on your IRS Form 1040. You are not eligible for a charitable deduction.
  • The Qualified IRA Charitable Transfer counts towards you required minimum distribution for the year in which you make the gift.
  • While it is fresh on your mind you may want to consider naming EWTN as a beneficiary of your IRA.

IRA Charitable Rollover: Example

Paul is 72 and wants to contribute to EWTN. He has $500,000 in his IRA and wishes to make a $20,000 gift. John can authorize his IRA plan administrator to transfer $20,000 to EWTN.

Because the IRA Charitable Transfer is excluded from income, John is not eligible for a charitable tax deduction, but still receives tax savings. The $20,000 distributed to EWTN will be counted toward his annual required minimum distribution (RMD) and he will not pay federal income tax on the portion given to charity.

Download a sample letter of instruction which you may send to your plan provider.

If you have specific questions regarding a qualified charitable distribution, please complete the form below and our Legacy Giving Advisor will be in contact with you.