IRA charitable rollover

IRA charitable rollover extended

Congress recently reinstated a law that allows donors to make a tax-free gift to a qualified charitable organization from their IRA, known as the IRA charitable rollover. Donors age 70½ or older are once again eligible to move up to $100,000 from their IRAs directly to qualified charities, such as Northwestern College, without having to pay income taxes on the money. This law no longer has an expiration date so donors are free to make annual gifts to a qualified charitable organization from their IRA this year and well into the future.

Here are the details of the legislation:

  • The donor must be 70½ or older on the day of the gift.
  • The donor can transfer up to $100,000 directly from the donor’s IRA to one or more qualified charities, such as Northwestern. This opportunity applies only to IRAs and not other types of retirement plans.
  • The donor pays no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so the donor benefits even if the donor does not itemize tax deductions.
  • The gift can satisfy all or part of a donor’s required minimum distribution for the year.
  • The donor does not receive any goods or services in return for the rollover gift in order to qualify for tax-free treatment.

Contact Cornie Wassink, director of planned giving, if you have any questions or would like assistance.

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