IRA Charitable Rollover
Charitable gifts to Stuart Hall School through your IRA
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 has extended the IRA Charitable Rollover for 2011. Originally passed in 2006 as part of the Pension Protection Act, the IRA Charitable Rollover allows individuals age 70½ and older to make direct transfers totaling up to $100,000 per year to 501(c)(3) charities, without having to count the transfers as income for federal income tax purposes.
• Who qualifies? Individuals who are age 70½ or older at the time of the contribution (you have to wait until your actual 70½th birthday to make the transfer).
• How much can I transfer? $100,000 for 2011 before December 31.
• From what accounts can I make transfers? Transfers must come from your IRAs directly to Stuart Hall School. If you have retirement assets in a 401(k), 403(b) etc., you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to Stuart Hall School.
• To what charities can I make gifts? Tax exempt organizations that are classified as 501(c)(3) charities, including Stuart Hall School, to which deductible contributions can be made.
• Can I use the rollover to fund life-income gifts (charitable gift annuities, charitable remainder trusts, or pooled income funds)? No, these are not eligible.
• Can I use the rollover to fund donor advised funds or supporting organizations? No, these are not eligible.
• How will Stuart Hall School count the gift? We will give you full credit for the entire gift amount.
• What are the tax implications to me?
o Federal – You do not recognize the transfer to Stuart Hall School as income, provided it goes directly from the IRA provider to us. However, you are not entitled to an income tax charitable deduction for your gift.
o State – Each state has different laws, so you will need to consult with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal income or federal tax paid. Still other states have no income tax at all.
• Does this transfer qualify as my minimum required distribution? Once you reach age 70½, you are required to take minimum distributions from your retirement plans each year, according to a federal formula. IRA charitable rollovers count towards your minimum required distributions for the year.
• How do I know if an IRA charitable rollover is right for me? You are at least age 70½ and
o You do not need the additional income necessitated by the minimum required distribution,
OR
o Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts,
OR
o You do not itemize deductions.
• What is the procedure to execute an IRA charitable rollover? Time is limited, so contact your plan provider to learn their procedures. A sample letter you can send to your plan provider to initiate a rollover follows. Make sure that you contact us when you direct the rollover so we can look for the check from your plan provider.
o If the IRA custodian does not have a specific form, the IRA owner may send a letter to the IRA custodian similar to the following:
Dear IRA Custodian,
Sec. 408(d)(8)(A) of the Internal Revenue Code permits an IRA rollover directly from an IRA custodian to a qualified public charity. As the owner of IRA account #0123456789 that is in the custody of your organization, I request that you transfer from that account the sum of $------- to Stuart Hall School. The Treasury Tax ID Number for Stuart Hall School is 54-0294670.
It is my intention to make a Qualified Charitable Distribution (QCD) to Stuart Hall School from my IRA as permitted by law. Under the Congressional JCT Technical Explanation of Sec. 408(d)(8)(A), this QCD will fulfill part or all of my IRA required minimum distribution for this year.
This letter is sufficient authorization for you to make this QCD gift. However, if you require any further documents, please forward those to me for my signature.
Cordially yours,
IRA Owner
For more information, please contact us.
Office of Development and Alumnae/i Relations
Stuart Hall School
P.O. Box 210
Staunton, VA 24402
(540) 213-7409
mwood [at] stuart-hall [dot] org
Printer-friendly version
Send to friend