Ways to Give › Plan a Legacy › IRA Charitable Rollover

IRA Charitable Rollover

In order to help nonprofit organizations like Children’s Hospital Central California Foundation further their good work, Congress extended the rules for charitable gifts made from individual retirement accounts (IRA) through December 31, 2009. If you are at least 70 ½ years of age, the federal government now permits you to rollover amounts from your IRA to a nonprofit without claiming any increased income or paying any additional tax. These tax-free rollover gifts could be for any amount up to $100,000.

What are some of the benefits?

• It’s especially good for donors who would like or intend to make a charitable donation, are required to take a minimum distribution and do not need the additional income at this time. Some benefits of an IRA rollover directed to a nonprofit organization include:
• The IRA rollover will not be included in your income for tax reporting purposes.
• The IRA rollover will count towards your annual required minimum distribution.
• The IRA rollover will reduce any potential estate tax.

How do I know if an IRA charitable rollover is right for me?

• You are at least age 70 ½ AND
• You do not need the additional income generated by the minimum required distribution OR
• Your charitable gifts already equal 50 percent of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts OR
• You are subject to the 3 percent rule that reduces your itemized deductions OR
• You do not itemize deductions

How do I initiate an IRA charitable rollover?

Contact your IRA administrator. Children’s Hospital Central California Foundation can provide you with a sample letter of direction if you would like. Make sure that you also let Children’s Hospital know when to expect your gift.