You may want to consider giving through your IRA if:
- You are over 70.5 years old
- You don’t itemize deductions
- You do not need your IRA’s Required Minimum Distribution (RMD)
- Your RMD causes more of your Social Security income to be taxed
- You are making charitable donations at your deduction limit, but want to give more
Consult your financial advisor today to find out if a charitable IRA rollover is right for you. Want to know more right away? Read through a list of frequently asked questions and download sample request forms below.
FREQUENTLY ASKED QUESTIONS ABOUT CHARITABLE IRA ROLLOVERS
WHAT IS A CHARITABLE IRA ROLLOVER?
It is a simple way for people to make charitable contributions using assets in their individual retirement account (IRA) to support organizations they care about.
IS THIS DIFFICULT TO DO?
Not at all. For most people it takes less than 20 minutes to set it up.
I HAVE HEARD ABOUT “QUALIFIED CHARITABLE DISTRIBUTIONS” (QCD). IS THIS THE SAME THING AS A CHARITABLE IRA ROLLOVER?
Yes. A QCD is the language used in the tax code, but they are more often referred to as Charitable IRA Rollovers.
WHAT IS THE MINIMUM AGE FOR MAKING A CHARITABLE IRA ROLLOVER GIFT?
You must turn 70.5 prior to completing the distribution. Although the Required Minimum Distribution (RMD) is not required until age 72, the QCD can be particularly beneficial for donors who do not itemize and instead file the standard deduction.
WILL MAKING A CHARITABLE IRA ROLLOVER GIFT AFFECT MY REQUIRED MINIMUM DISTRIBUTION (RMD)?
If you are age 72 or older, the amount distributed to FNFSR will be deducted from your RMD. You can contribute more than your RMD if you wish, up to $100,000. There are some fine points one should discuss in advance with your tax preparer.
CAN I GET A TAX DEDUCTION FOR MAKING A CHARITABLE IRA ROLLOVER?
IRA rollover gifts are generally not deductible – but the money is not included in your income in the first place, which for many people is more favorable than a deduction. Since many people use the standard deduction when filing their taxes, charitable gifts may not provide an additional financial benefit.
I HAVE A ROTH IRA. CAN I USE IT FOR A CHARITABLE IRA ROLLOVER?
Roth IRAs are generally eligible for rollover treatment; however, you may wish to discuss with your financial advisor whether this is the best way for you to give.
I DON’T HAVE AN IRA. CAN I MAKE A CHARITABLE IRA ROLLOVER FROM ANOTHER TYPE OF RETIREMENT ACCOUNT?
No. Transfers must come directly from an IRA or Roth IRA. However, if you have retirement assets in a 401(k), 403(b), etc., you may be able to roll those funds into an IRA, then use the IRA for giving. Please discuss this option with your financial advisor.
WHAT IS THE MINIMUM GIFT SIZE? IS THERE A MAXIMUM?
The minimum gift size depends on the policies of your IRA custodian. The maximum distribution permitted by the IRS is $100,000, per taxpayer, per year. Again, there are some fine points one should discuss in advance with your tax preparer.
ARE THERE RESTRICTIONS ON THE CHARITABLE IRA ROLLOVER?
A rollover cannot be used to make gifts when the donor receives a benefit in return (e.g., to attend a dinner).
HOW DO I INITIATE A CHARITABLE IRA ROLLOVER?
In most cases, you should start by contacting your IRA custodian as soon as you have decided to proceed. If you have an IRA with check-writing features, please be aware that your check must be made out to “Friends of the North Fork of the Shenandoah River” and must clear the account by December 31 to count toward the current year’s RMD.
WHEN SHOULD I INITIATE A REQUEST FOR A DISTRIBUTION?
You may request a distribution at any time during the year. If you want your distribution to count toward this year’s RMD, please initiate your transfer as soon as possible and no later than early December to allow ample time for any transfer to be completed. If you want to get a jump on the next tax year, initiate a transfer in January.
ARE THERE SPECIAL FORMS I NEED TO USE?
Your IRA custodian may have its own form to request the transfer; if not, you can download a sample instruction letter you could send to your custodian, as well as a companion letter to send to FNFSR so we know what you have set in motion at the bottom of this page.
CAN MY IRA GIFT SATISFY A PLEDGE OR CREATE AN ENDOWMENT?
Yes, subject to agreement with FNFSR’s gift acceptance policies.
WHAT TYPE OF ACKNOWLEDGEMENT SHOULD I EXPECT?
We will send you a written acknowledgement of your gift to thank you and to confirm the amount of your gift and its intended purpose. Remember that IRA distributions are not tax deductible but they are much appreciated.
SAMPLE FORMS FOR YOUR IRA CUSTODIAN AND FOR FNFSR TO INITIATE A CHARITABLE IRA ROLLOVER/ QUALIFIED CHARITABLE DISTRIBUTION
Friends of the North Fork of the Shenandoah River is a tax-exempt 501(c)(3) non-profit organization, Federal Identification Number 04-2148397.