IRA Charitable Rollover
The IRA Charitable Rollover allows individuals age 70 ½ and over to donate up to $100,000 in individual retirement account (IRA) assets to the YMCA of Greater Michiana. The Charitable IRA Rollover is tax-free and not included in a donor’s adjusted gross income.
How does this work?
Individuals may make gifts to charity from traditional and Roth IRA accounts without any federal tax liability as long as the gifts are “qualified charitable distributions." No charitable deduction may be taken by the owner, but distributions will qualify for all or part of an IRA owner’s Required Minimum Distribution.
Requirements for “qualified charitable distributions”
- Gifts are tax-free up to $100,000 per year
- Gifts will qualify for all or part of your Required Minimum Distribution
- IRA holder must be age 70 ½ or older at the time of the gift
- Gifts must be outright gifts to a charitable organization
- Distributions may only be made from traditional IRAs or Roth IRAs
Who benefits from this provision?
- People who normally do not itemize their deductions can avoid taking the IRA distribution as income and send it directly to charity. This may reduce both their federal and state income tax liability.
- Individuals whose IRA distributions increase their income to a level where 85% of their social security is taxed may want to make a qualified charitable distribution to reduce their income.
- Individuals in high-income brackets who have large IRAs may have substantial income tax savings not otherwise available because of charitable deduction limitations. A qualified charitable distribution of up to $100,000 may have the three-fold benefit of reducing their taxable income, reducing the value in their IRA, and meeting their Required Minimum Distribution.
This is an excellent opportunity for individuals to fulfill their charitable goals. Transfers from IRAs can fund the YMCA’s Capital Campaign, Annual Fund, and the Endowment.
To transfer a gift from your IRA, please contact your IRA administrator directly. The YMCA’s Tax Identification Number is 38-1358236.
For more information on how you may benefit the YMCA through an IRA Charitable Rollover gift, please contact Jill Haboush, Chief Development Director, at 269-683-1552 or jhaboush@ymcagm.org.
The above is not intended as legal or tax advice. For such advice, please consult with your attorney or tax advisor.
