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Charitable IRA Rollover

New legislation designed to help make sure that you don’t outlive your assets in retirement has implications for charitable planning, including the popular IRA rollover gift.
The law:
1.    Raises the age at which you must start receiving retirement distributions from 70½ to 72.
2.    Allows contributions to be made to a regular IRA after the age of 70½.
3.    Requires (with certain exceptions) that retirement funds given to nonspousal beneficiaries be fully distributed within ten years.
The official title of the legislation is “Setting Every Community Up for Retirement Enhancement Act of 2019,” popularly known as “the SECURE Act.” It was signed into law by the president on December 20. Most of the provisions become effective in 2020.

 

Charitable IRA Rollover Rules

  • Donor must be at least 70 ½ years of age when the gift is made
  • Transfer must be made directly from the IRA administrator to the West Point Association of Graduates
  • The maximum allowed gift per individual is $100,000 per year
  • Must be an outright gifts. Contributions for life income gifts—such as gift annuities or charitable remainder trusts are not permitted.
  • This gift opportunity only applies to IRAs. The charitable IRA distribution can be used to pay a pledge
  • Go to this site for more information about the SECURE ACT

Benefits of a Charitable IRA Rollover

  • May make a significant gift without using cash or other assets
  • The rollover amount is a tax-exempt distribution and not subject to income tax
  • IRA rollover can be used to meet all or part of required minimum distribution (RMD)
  • Gift is not subject to charitable gift limitations

Steps to make a Charitable IRA Rollover to WPAOG

  • Contact your IRA plan administrator
  • For credit: direct your plan administrator to make the transfer on or before December 31. Postmark must be no later than December 31.
  • Inform us of the designation of your gift. You may do so by:
    noting the designation at the bottom of your direction letter and submitting by mail, fax, or email attachment, or sending an email to giftoperations@wpaog.org with your name, contact information, IRA administrator name, gift amount, and designation.