“IRA Charitable Rollover” Gift Opportunity Extended for 2013
Due to recent congressional action, you again have a special planning opportunity if you are age 70 ½ or older, own an IRA, and intend to make charitable gifts this year. If this describes you, you can now make distributions directly from your IRA to Newton-Wellesley Hospital without the distributions’ being included in taxable income or being subject to withholding.
In addition, rollover gifts will count towards your required minimum distribution (RMD). Because of the RMD rule, some donors find they must withdraw (taxable) funds they don’t need from their IRA. For them, a tax-free way to use those funds to support their favorite charity is particularly attractive.
Without this “charitable rollover” provision, using IRA funds for a charitable contribution requires withdrawing money from your IRA and then contributing it. The amount withdrawn will be taxable, and the deduction for the contribution may or may not offset your tax. By contrast, an IRA charitable rollover eliminates the guesswork. And for those who do not itemize their deductions, it allows you to receive the same benefit from your gift as those who do itemize receive.
Making a charitable rollover gift from your IRA rather than other assets may be especially appropriate if:
- you do not itemize deductions,
- you would not be able to deduct all of your charitable contributions because of deduction limitations, or
- an increase in taxable income may negatively impact your ability to use other deductions.
Certain limitations apply to these non-taxable charitable distributions from an IRA:
- They cannot exceed $100,000 per person per year.
- They must be made to a public charity such as Newton-Wellesley Hospital (not a private foundation), and they cannot be to a supporting organization or a donor advised fund.
- The gifts must be outright. For instance, they cannot be used to establish a gift annuity or fund a charitable remainder trust.
- No goods or services, such as tickets to an event, can be received in exchange for the contribution.
- Congress extended this giving opportunity only through the end of 2013.
For more information or for sample form letters to simplify the IRA Charitable Rollover gift process please contact Liz Gianakos at (617) 243-6571 or NWHCF@partners.org.
We also ask you to consult with your advisors to determine the best gift for you.
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