A Tax-Saving Way to Support The Art League!
If you are 70½ years old or older, you can take advantage of a simple way to make a charitable gift and receive tax benefits in return. You can give up to $100,000 from your IRA directly to a qualified charity such as BCF (Baltimore Community Foundation) without having to pay income taxes on the money. This popular gift option is commonly called the IRA charitable rollover, but you may also see it referred to as a qualified charitable distribution, or QCD for short.
Why Consider This Gift?
- Your gift will be put to use today, allowing you to see the difference your donation is making.
- You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
- If you have not yet taken your required minimum distribution for the year, your IRA charitable rollover gift can satisfy all or part of that requirement.
Donors interested in this giving opportunity should consult their tax professionals for advice and contact the Development Office (703-519-1741 or firstname.lastname@example.org) to learn how the charitable IRA rollover provision can help you support your area of choice at The Art League.
Frequently Asked Questions
What is a charitable IRA rollover?
The charitable IRA 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 Art League, Inc.
Since it was first made available in tax year 2006, donors age 70 1/2 or older have used this option to support the League with tax-wise gifts ranging from $100 to $100,000. Currently, the law extends the charitable IRA rollover provision indefinitely — with no expiration date — allowing individuals to make qualifying gifts every tax year.
Why will lifetime IRA gifts be easier?
Under current law, withdrawals from traditional IRAs and certain Roth IRAs are taxed as income, even if they are immediately directed to a charity. The donor receives a tax deduction for his or her donation, but various other federal, and sometimes state, tax rules can prevent the deduction from fully offsetting this taxable income. As a result, many donors have chosen not to use IRA assets for lifetime gifts. The charitable IRA rollover eliminates this problem.
Who can benefit from using the charitable IRA rollover to make a gift?
- Persons with significant assets in an IRA
- Persons 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 charitable deductions.)
- Persons having so few deductions that they choose not to itemize
Can my gift be used as my required minimum distribution under the law?
Yes, absolutely. If you have not yet taken your required minimum distribution, the IRA charitable rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.
Do I need to give my entire IRA to be eligible for the tax benefits?
No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your IRA is valued at more than $100,000, you can transfer a portion of it to fund a charitable gift.
Can a rollover gift be used to fund a charitable remainder trust or charitable gift annuity?
No. The donor can receive no benefits in return for the gift. This includes life income plan payments.
Can a gift be made to any charity?
No. Excluded are:
- Donor-advised funds
- Supporting organizations
- Private foundations
Are there any benefits that a donor can receive?
The only permissible benefits from a charitable IRA rollover gift are those that would not reduce the tax deduction for which the donor would have otherwise qualified. At The Art League, a charitable IRA rollover gift is allowed to count toward naming and sponsorship opportunities, scholarships, and endowments.
I'm turning age 70½ in a few months. Can I make this gift now?
No. The legislation requires you to reach age 70½ by the date you make the gift.
I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
Yes. Direct rollovers to a qualified charity can be made only from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit-sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to The Art League. To determine if a rollover to an IRA is available for your plan, speak with your plan administrator.
When do I need to make my gift?
We must receive your gift by Dec. 31 for your donation to qualify this year. If you have check-writing privileges on your IRA account, please mail your check by Dec. 20 in order to give us time to process your gift before the end of the year.
I have two charities I want to support. Can I give $100,000 from my IRA to each?
No. Under the law, you can give a maximum of $100,000. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
My spouse and I would like to give more than $100,000. How can we do that?
If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA.
Can I still make a gift with an IRA beneficiary designation?
Absolutely! Whether or not you choose to make a charitable IRA rollover gift, you can still designate The Art League, Inc. as a beneficiary to receive IRA assets after your lifetime. The lifetime charitable IRA rollover is simply another option for donors who would like to see their philanthropy at work now.
I've already named The Art League as the beneficiary of my IRA. What are the benefits if I make a gift now instead of after my lifetime?
By making a gift this year of up to $100,000 from your IRA, you can see your philanthropic dollars at work. You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have made by transferring that amount from your IRA as long as it is $100,000 or less for the year.
- Contact the Development Office (703-519-1741 or email@example.com) for additional information on giving an IRA gift.
- Seek the advice of your financial or legal advisor.
- Ask your IRA administrator about making a direct transfer to The Art League or have the administrator send a check from your account to us. (To be tax-free, the donation must go directly from your account to The Art League without passing through your hands.)
Legal Name: The Art League, Inc.
Address: 105 North Union Street, Alexandria, VA 22314
Federal Tax ID Number: 54-0833818
Contact Charlene Haskell in our development office: