IRA Information

Doing Good with Your IRA

The IRA charitable rollover provision, which became permanent in 2015, allows tax-free distributions of up to $100,000 per taxpayer per taxable year to an eligible charitable organization, such as the Community Foundation of the Texas Hill Country, from an IRA held by individuals age 70½ or older. Because the distribution goes directly to a qualified charity (the Foundation), the amount will neither be counted as income nor subject to income tax. Using IRA assets to make a gift during your lifetime, as opposed to giving via bequest in your will, enables you to experience the joy of making a major gift.

 

How to Begin the Rollover Process

The Community Foundation recommends that you contact your IRA administrator as soon as possible and ask for your provider’s instructions for executing an IRA charitable rollover. If needed, the Foundation can provide you with a sample letter that you can send to your provider to initiate the rollover gift.

IRA transfers to the Community Foundation of the Texas Hill Country address a broad range of current and future needs. We evaluate all aspects of community — arts and heritage, aging and elder care, basic needs, education, environment, health and well-being, etc. — and awards grants to select projects and programs. The transfer can be a direct donation or as a gift to an established or newly created fund. IRA rollover gifts cannot be made to donor advised funds, but they can be made to field of interest funds or designated funds.

 

Up to $100,000 Per Year

You can transfer excess retirement assets up to $100,000 per year directly and easily to the Community Foundation. The transaction incurs no federal income tax, and the asset is no longer part of your estate for tax purposes. You can choose to give during your lifetime so that you (and the community) can see results sooner than if your gift had been made through a will.

Larger estates face confiscatory tax rates that significantly reduce the amount left to their heirs (other than a spouse). Any amounts left in an IRA when an individual dies may be taxed as income to the beneficiary and are also considered assets for the purpose of calculating that person’s estate tax liability. When you give your IRA to charity, your heirs are not burdened by the taxes associated with receiving your IRA upon your death. Instead, you can leave them other assets that have a more favorable tax treatment.

____________________

Need more information? Please let us know how we can help.  The Community Foundation’s EIN is 74-2225369.