IRA Charitable rollovers represent a significant opportunity for Zion members to make current and future annual gifts to support the ministry of Zion Lutheran Church. If this interests you, read further and talk with your financial planner.
What is the IRA Charitable Rollover?
At the end of 2015, federal legislation was passed making the IRA direct charitable rollover gift option permanent. The law allows “senior” charitably minded individuals a golden opportunity to make gifts directly from their IRAs and exclude the amount of their gift from gross income. Persons over the age of 70½ may make a gift to their church directly from their IRA, which counts toward their required minimum distribution, without including the distribution as personal income.
Some of the Criteria:
- You must be 70½ or older when the transfer is made.
- The transfer must go directly from your IRA administrator to your church.
- The gift counts toward your IRA required minimum distribution.
- The distribution is not reported as income, so there is no adverse income tax effect.
- Gifts must be outright: not to donor advised funds, charitable remainder trusts, or for charitable gift annuities.
Mrs. Charles has been a strong supporter of her congregation over her life. She is now at an age where she has an IRA from which she must now take minimum required distribution (i.e., she is over age 70½) and this year that amount is $10,000. After discussing the matter with her Pastor and her financial advisor, Mrs. Charles has decided to give the distribution directly from her IRA to her local church. By doing this direct transfer to her church, she will be avoiding any additional income taxes, supporting the ministries of her church and satisfying the required distribution rule. In addition, she plans to continue making IRA rollover gifts to her church in the future.
For many people this is a win/win opportunity. I invite you to talk with me, Pastor Ted, and with your financial planner to see how this might work for you.