Going, Going, Gone ... the IRA Charitable Rollover

It’s been said that all good things must come to an end, and by all indications that is true for the “IRA Charitable Rollover." Pretty much everyone agrees that Congress will not be renewing it after this year.

Since 2006, many charities and donors have benefitted from congress allowing an individual with a traditional IRA and at least 70 1/2 years of age to move money out of an IRA without triggering any tax liability.

This function, known as the IRA Charitable Rollover, has been a huge boon to donors and nonprofits, enabling many people to give through this highly tax advantaged method. 

Encourage your donors to take advantage of the IRA Charitable Rollover before the end of the year. This is their last chance!

Keep this brief list near your phone or computer so when someone inquires you can quickly review the highlights.   

  1. Unless Congress extends this again, which is not likely, this opportunity ends at midnight on December 31, 2013.  
  2. The owner of the IRA must request the custodian of the account to send a certain sum directly to your charity, up to $100,000.
  3. The donor must not have the funds in his or her possession “even for a nanosecond,” - Conrad Teitell.
  4. The money must arrive in your charity's account by midnight on December 31, 2013. 
  5. All gifts to charity via this method cannot exceed $100,000 total. It does not mean a donor can give $100,000 per charity.
  6. Experience shows many donors who give through the IRA Charitable Rollover are people who do NOT itemize their taxes.
  7. There is no income tax deduction for a gift made this way; however, neither does the donor have to include the distribution as a portion of their adjusted gross income (AGI).
  8. For their tax records, donors need a receipt from the charity acknowledging the gift.
  9. Going forward it will remain possible to pass an IRA to a charity via an estate plan. Owner must contact the custodian to complete appropriate paperwork.  
  10. Your organization's tax ID number ________________ and correct legal name is __________________________.  (Anyone doing an IRA Rollover will need this)