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By: Mary Beth Crawford, Esq.
Principal Cummings & Lockwood, LLC
Chairman of the DLC Planned Giving Committee

Did you know that if you are over the age of 70 ½, you may make a tax-free rollover of up to $100,000 from your individual retirement account (IRA) to a public charity?

The American Taxpayer Relief Act of 2012 (the 2012 Tax Act), Congress reinstated the ability to make direct qualified charitable distributions (QCDs) from your IRA, in amounts up to $100,000 by IRA owners who are at least age 70½ years of age. We are alerting you to this important gifting opportunity because, under current law, it is set to expire again at the end of 2013.

If you are age 70 ½ or above, the “IRA Charitable Rollover” provision would allow you to treat the charitable transfer as a “tax-free” withdrawal. In other words, the amount transferred to the charity via an IRA Charitable Rollover will not be included in your taxable income or taken into account in determining the availability of a charitable deduction for other charitable contributions made during the tax year in which the IRA Charitable Rollover is made. Moreover, the amount transferred to charity will be taken into account in determining whether the required minimum distribution rules (relating to distributions from qualified retirement plans) have been met.

IRA CHARITABLE ROLLOVER CAVEATS WORTH MENTIONING

1. There is a very limited “window of opportunity” — The IRA Charitable Rollover provision is set to expire at the end of 2013 (again!).
2. To qualify as an IRA Charitable Rollover, all transfers must be made directly from the IRA to the charitable organization. In other words, the check must be payable directly to the charity.
3. The IRA Charitable Rollover is only available for donors aged 70 ½ and up.

In addition to making lifetime gifts to the charity through your IRA, there is a significant estate tax benefit to name a charity as the beneficiary of your IRA. The charity will not pay any income taxes attributable to the receipt of retirement assets while a non-charitable beneficiary will be responsible for income tax when taking distributions from the IRA. In addition, there is a charitable deduction for assets passing to charity for purposes of the estate tax.

For more information on how you might be able to make an IRA Charitable Rollover for the benefit of the David Lawrence Centers & Foundation, please contact Stephen Wheeler, Chief Development Officer, at 239-354-1416.