IRA Charitable Rollover

The IRA Charitable Rollover, or qualified charitable distribution (QCD), is a special provision allowing certain donors to exclude from taxable income—and count toward their required minimum distribution—certain transfers of Individual Retirement Account (IRA) assets that are made directly to public charities, including the IEEE and IEEE Foundation. Since it was first made available in tax year 2006, many donors age 70 ½ or older have used this popular option to support the areas of their choice with tax-wise gifts ranging from $100 to $105,000 (and up to $210,000 for married couples).

IRA Charitable Rollover makes it easier to use IRA assets, during lifetime, to support your favorite charities.

A gift that qualifies, technically termed a “qualified charitable distribution,” is:

• Made by a donor age 70 ½ or older.
• Transferred from a traditional or Roth IRA directly to a permissible public charity, such as the IEEE or IEEE Foundation. (If giving in this manner, please tell your broker or fund manager to name you as the donor on the transfer, and if your gift is intended for a particular area have the broker specify that as well.)
• Completed during the applicable tax year.

Yes, there is a limit. An individual taxpayer's total IRA Charitable Rollover gifts cannot exceed $105,000 per tax year. Married couples can donate up to $210,000 per year.

If you have not already taken your required minimum distribution in a given year, a qualifying rollover gift can count toward satisfying this requirement.

No. The gift would be excluded from income, so providing a deduction in addition to that exclusion would create an inappropriate double tax benefit.

Withdrawals from a Roth IRA may be tax-free only if the account has been open for longer than five years or if certain other conditions apply. Otherwise, withdrawals are taxed as if they came from a traditional IRA. Therefore, certain Roth IRAs could benefit from a IRA Charitable Rollover.

No. However, it may be possible to make a tax-free transfer from such other accounts to an IRA, from which a charitable rollover can then be made. Speak with your financial advisor or fund administrator to learn more.

• People with significant assets in an IRA.
• People making gifts that are large, relative to their income. (Because a charitable rollover is not included in taxable income, it does not count against the usual percentage limitations on using income tax charitable deductions.)
• People who do not itemize.

Yes. You can honor your pledge with one or more qualified IRA Charitable Rollover transfers of up to $105,000 per person (and $210,000 for married couples), per calendar year.

The only permissible benefits from an IRA Charitable Rollover gift are those that would not reduce the tax deduction for which the donor would have otherwise qualified (such as goods or services from a charity, given in exchange for the gift). At the IEEE and IEEE Foundation, a charitable IRA rollover gift is allowed to count toward naming opportunities and toward recognition society memberships such as the IEEE Heritage Circle and IEEE Goldsmith Legacy League.

It simply will be included in taxable income as other IRA withdrawals currently are.

While this is a great option, other types of gifts may provide donors with more tax benefits. As with any gift planning question, donors should consult their tax professionals for specific advice.

Yes. The current law extends the IRA Charitable Rollover provision indefinitely—with no expiration date—allowing individuals to make qualifying gifts every tax year.

Yes. You can exclude up to $105,000 (per IRA account owner and up to $210,000 for married couples) from gross income for qualified charitable donations. The donation counts toward your RMD but is not limited by your RMD.

Yes. Qualified IRA gifts are not subject to percentage of adjusted gross income (AGI) limitations for charitable contributions and are not reportable as income for federal income tax or for Social Security income purposes. The amounts withdrawn are not subject to state income taxes in most states. Donors who do not itemize deductions on their federal income tax returns may benefit from qualified IRA gifts for their exclusion from gross income. Amounts withdrawn from an IRA account are removed from the donor’s taxable estate. Talk to your tax advisor to see which benefits apply to your specific situation.

No, for a gift to be a qualified charitable distribution it must be sent directly to the IEEE Foundation by the IRA administrator.