IRA Charitable Rollovers

A IRA Charitable Rollover transfers money from a Traditional IRA to a qualified charity, like the Church of The Covenant.  A gift of this kind is very advantageous to individuals over the age of 70 ½.  After age 70½ individuals invested in IRAs must make a mandatory annual withdrawal, a Required Minimum Distribution (R.M.D.), from those accounts.  An RMD adds income to the taxable total for those taxpayers and tends to increase their income taxes, whether they want it or not.

These IRA transfers must be sent directly to the charity OR the IRA account holder can have a check issued to the charity and delivered to him/her.  Then s/he can deliver the check personally to the charity.  Beware, it does not work if the account holder receives a distribution into a personal account and then decides to give it.  Money arriving like that, into the personal control of the accountholder, is just like any other payout, and taxable.

Any money transferred as a IRA Charitable Rollover, reduces the amount of mandatory RMD and is not added to the accountholder’s income.

Other benefits of IRA Charitable Rollovers include:

  • Up to $100,000 per individual accountholder, per year; qualifies to be transferred;
  • Amounts transferred are not included in gross income for Federal taxation;
  • Gifts can be for designated purposes or memorials, but not for special events, donor advised funds or remainder gifts (with income to the donor);
  • There is no limit to the number of charities or the number of transfers you can make to each  one;
  • If your IRA has a check-writing feature, the accountholder can write a check to the charity and that check and amount can qualify as a direct transfer;
  • This program does not expire; it can be repeated year-after-year.

A transfer is easy.  Contact your IRA custodian or administrator and tell them you want to make an IRA Charitable Rollover.  There will probably be an authorization form to complete and submit.  Some firms have those forms on their web sites to down-load, complete and submit.  Advance notice to the Church Office about an upcoming transfer and amount, helps the Church to accurately record the gift and its origin.

For a list of Frequently Asked Questions (FAQ) click here

If you would like to consider a IRA Charitable Rollover gift, please contact the Church.  Church officers are happy to work with your advisors.  As always, the Church of The Covenant suggests you contact your tax and legal professionals.  These advisors are in the best position to assure you every advantage to be gained from your gift.