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Gifts Through Your IRA

If you are 72 or older, you can make a tax-free distribution from your IRA.

The IRA Charitable Rollover has been extended permanently. The following will supply answers to some of the important questions surrounding the IRA Charitable Rollover.

Who qualifies? 

  • Individuals who are at least age 72 at the time of the contribution.

How much can I transfer? 

  • Up to $100,000 for each year.

From what accounts can I make transfers? 

  • Transfers must come from IRAs directly to charity. If you have retirement assets in a 401(k), 403(b), etc., you must first roll those assets into an IRA, and then can make the transfer from the IRA directly to charity.

Can I use the transfers to fund life-income gifts like charitable remainder trusts or charitable gift annuities? 

  • No, these are not eligible.

Can I make a transfer to my donor advised fund or supporting organization?

  • No, these are not eligible.

What are the tax implications?

  • Federal – You do not recognize the transfer as income, provided it goes directly from the IRA provider to charity; you are not eligible for an income tax charitable deduction.
  • State – Each state has different laws, so check with your own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow a 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.

Can the transfer qualify as my minimum required distribution? 

  • You must take your first required minimum distribution for the year in which you turn age 72 (70 ½ if you reach 70 ½ before January 1, 2020). However, the first payment can be delayed until April 1 of 2020 if you turn 70½ in 2019.

  • IRA rollovers to charity count toward your minimum required distribution (RMD)

I’m over age 72—should I consider an IRA rollover?  Yes, especially if:

  • You do not itemize deductions but make charitable gifts, OR
  • You are subject to the limitation on itemized deductions, OR
  • You are required to take a distribution from your IRA that you just don’t need, OR
  • Your charitable gifts already equal 50% of your adjusted gross income.

How can I transfer funds to Macalester from my IRA?

  1. Contact your IRA plan administrator to make a gift from your IRA to Macalester.
  2. Your IRA funds will be directly transferred to Macalester.
  3. Please note that IRA charitable rollover gifts do not qualify for a charitable deduction.
  4. Please contact us if you wish for your gift to be used for a specific purpose.

Questions? Contact Theresa Gienapp, Director of Planned Giving at [email protected] or (651) 696-6087.