IRA Charitable Rollover

In late 2015, after years of last minute renewals, Congress made permanent and the President signed into law the Individual Retirement Account (IRA) Charitable Rollover legislation which allows individuals age 70 1/2 or older to transfer up to $100,000 of tax-free gifts on an annual basis from their IRA directly to charitable organizations like NDCL.

While taxpayers age 59 1/2 may begin taking distributions from their IRA, they are required to take annual distributions at age 72 and older. These distributions are normally included in the taxpayer's adjusted gross income (AGI), and therefore subject to taxes. However, when the taxpayer turns 70 ½ years old, they are eligible to make a tax-free donation from their IRA, regardless of whether or not they itemize deductions on their tax returns.

• The IRA charitable rollover permits those taxpayers age 70 1/2 or older to make donations directly to NDCL from their IRAs without counting them as part of their AGI, and consequently without paying taxes on the contribution.
• The annual cap on a donor's total combined charitable IRA rollover contributions is $100,000. Couples can contribute individually from their IRAs, resulting in potential annual gifts of up to $200,000 from one couple to their favorite charity.
• Distributions can be made from traditional IRA accounts or Roth IRAs, and the charitable contributions from the IRA must be payable directly from the IRA trustee to an eligible public charity (excluded are donor advised funds, supporting organizations and private foundations).
• Donors cannot receive any goods or services in return from their charitable IRA rollover contributions in to order to qualify for the tax-free provision, and must obtain written substantiation of each rollover contribution from each recipient charity. Since the IRA charitable rollover is a tax-exempt distribution, in many cases it provides an incentive to eligible donors to increase the size of their contribution.

In the last two years, some examples of donors' IRA contributions to NDCL are:

• $50,000 gift to establish a new endowed scholarship
• $10,000 gift to the locker room renovation
• $1,500 gift to the NDCL Fund 

"We established an endowed scholarship through a charitable rollover from our IRA. This gift will make an immediate impact and provide scholarships for NDCL students. These young men and women are our future and we invest in NDCL so that they can make a difference in our world."   ~Mel `53 and Geri (Grdina `55) Amato