If you are over age 70½, the Federal government permits you to rollover up to $100,000 from your IRA to charity without increasing your taxable income or paying any additional tax. These tax-free rollover gifts could be $1,000, $10,000 or any amount up to $100,000 this year. The gift satisfies your required minimum distribution (RMD) for this year.
Not yet 70½? This law has been made permanent and in the future you may want to take advantage of what it offers. Also, if you are helping someone in this age group with their finances and planning, please consider sharing this information.
Your IRA may have increased in value over the years and you have more income than you need. The IRA rollover gift is a simple and easy way to provide for your favorite charity while not increasing your taxable income. Simply contact your custodian and request that an amount be transferred to charity. The nonprofit receives a nice gift and you avoid any additional tax and satisfy your RMD for the year.
Perhaps you are considering your tax planning goals and would like to make a major gift to charity. Like many individuals, your IRA may be the largest asset in your estate. Your CPA may be looking for ways to save taxes. By making an IRA charitable rollover gift of up to $100,000, you can reach your goal of helping charity in a significant way and reducing taxable income.
Future IRA Gift Options
While you have the opportunity to give through your IRA now, there are other options available for making future gifts from your individual retirement account to charity.
Bequest of IRA
One option is to designate charity as the beneficiary of your IRA. This permits you to continue to take withdrawals from your IRA during life and then leave the remaining value of your IRA to charity.
Testamentary IRA Gift Annuity
Another option is to make a future gift of your IRA to charity while providing life income to your heirs. Your family members will receive fixed payments based on their ages.
Testamentary IRA Unitrust
An IRA could also be transferred to a special “Give It Twice” trust that usually provides income to children for a period of up to 20 years. After that time, the trust may pass to charity, creating a wonderful way for you to make a charitable gift.
To learn more about making an IRA gift to NMF’s endowment or to one of our component funds, contact Development Officers Lisa Peterson, or Dawn Ganje at 218 759-2057 or visit our website at www.nwmf.org.