IRA Charitable Rollover
The IRA Charitable Rollover provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.
To qualify:
- You must be age 70 ½ or older at the time of gift.
- Transfers must be made directly from a traditional IRA account by your IRA administrator to The Epsilon Educational Endowment. Funds that are withdrawn by you and then contributed do NOT qualify. Gifts from 401k, 403b, SEP and other plans do not qualify.
- Gifts must be outright. Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities do not qualify.
Benefits—qualified charitable distributions:
- Can total up to $100,000/annually.
- Count towards your required minimum distribution for the year from your IRA reducing the amount you need to pay taxes on.
- Charity receives the full amount distributed “tax free”.
Example
Jane wants to make a contribution to The Epsilon Educational Endowment. She is 73* and is required to take a minimum distribution of $20,000 from her IRA but does not need the income. She can authorize the administrator of her IRA to transfer $20,000 to Alpha Epsilon. The $20,000 distributed to Alpha Epsilon will not be subject to federal tax and will be counted toward her annual minimum required distribution.
*Note that under the Secure Act 2.0, the age at which you are required to make minimum distributions (RMD) was raised to age 73 for individuals born between 1951 and 1959, and age 75 for those born in 1960 or later.
As you plan your required minimum distributions for this year, if you do not need the money the government is requiring you to take, consider using it for a charitable gift using the IRA Charitable Rollover.
See below for sample letters you can send to your plan provider to initiate a rollover. Make sure that you contact Steve Starnes, E’01 by phone at 616-802-4462 or email [email protected] when you direct the rollover so we can look for the check from your IRA administrator.
Sample Letter of Instruction from Donor to IRA Provider
{Date}
{Name of IRA Provider}
{Address}
{City, State, Zip}
(Call your plan provider to determine the most efficient way to send this letter of instruction)Re: Request for Qualified Charitable Distribution from Individual Retirement Account
Dear Sir or Madam:
Please accept this letter as my request to make a qualified charitable contribution from my Individual Retirement under Sec. 1201 of the Pension Protection Act of 2006 (the PPA) and Sec. 408(d)(8) of the Internal Revenue Code of 1986, and made permanent under the Consolidated Appropriations Act of 2016. My account Number is {Account Number}.
Please issue a check in the amount of $____________ payable to The Epsilon Educational Endowment at the following address:
2746 Beechwood Dr SE
Grand Rapids, MI 49506In your transmittal to The Epsilon Educational Endowment, please state my name and address as the donor of record in connection with this transfer, and copy me on your transmittal. It is my intention to have this transfer qualify during the {Year} tax year. Therefore, it is imperative that this distribution be postmarked no later than December 31, {Year}.
If you have any questions or concerns regarding this request, I can be reached at {Phone Number} or {Email Address}.
Thank you for your prompt attention to and assistance with this matter.
Sincerely,
{SIGNATURE OF IRA OWNER}
© 2023 The Epsilon Educational Endowment