Healthcare Foundation -- Northern Sonoma County

Serving the communities of Windsor, Healdsburg, Geyserville, & Cloverdale

Charitable Rollover

IRA Charitable Rollover - Great for Donors and the Healthcare Foundation

The Pension Protection Act of 2006 (PPA) permitted donors to roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income. While the law expired in 2007, on December 18, 2015 the President signed the PATH Act making this special charitable giving vehicle permanent.

What is an IRA Charitable Rollover Distribution?

The law uses the term "qualified charitable distribution" to describe an IRA charitable rollover.

Who Qualifies to Use this Giving Vehicle?

A qualified charitable distribution is money that individuals who are 70½ or older may direct from their traditional IRA to eligible charitable organizations. The provision has a cap of $100,000 for charitable distributions from individual IRAs each year. The amount distributed - up to $100,000 directly to an eligible charity allows donors to deduct this from their gross income.

How Does It Work?

Donors request a transfer from their IRA to the Healthcare Foundation. The Plan Administrator contacts the Healthcare Foundation and transfers the requested amount.  Donors can transfer more than $100,000 and can request multiple direct transfers from their IRA to qualified charities in a year, but only $100,000 will be excluded from income as an IRA qualified charitable distribution. 

What if Donors Want to Contribute More Than $100,000 to a Qualified Charity From an IRA?

The law limits the amount that donors are able to exclude from their income to $100,000. If donors wish to take funds from their IRA to contribute more than $100,000 to charity, they cannot exclude the additional amount from their gross income.  

Contact us to learn more about this and other tax-deferred giving strategies to benefit the healthcare of our community. Email: dmason@healthcarefoundation.net

 

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