Use Your Traditional IRA to Make a Charitable Gift
If you are 70 1/2 years or older, did you know that you can make a charitable gift directly from your traditional IRA account without incurring federal income tax on the withdrawal?
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 1/2 or older at the time of gift.
- Transfers must be made directly from a traditional IRA account by your IRA administrator to Glendale Memorial Hospital. Funds that are withdrawn by you and then contributed do NOT qualify.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 are not allowed.
Benefits - Qualified Charitable Distributions:
- Can total up to $100,000.
- Are not included in your gross income for federal income tax purposed on your IRS Form 1040 (no charitable deduction is available, however).
- Count towards your minimum required distribution for the year from your IRA.
Example:
Suppose John has $500,000 in an IRA and he also wants to contribute $20,000 to Glendale Memorial Hospital. He can authorize the administrator of his IRA to transfer $20,000 to GMHHC and $5,000 to himself. The $20,0000 distributed to the hospital will NOT be subject to federal tax and will be counted toward his annual minimum required distribution.
As you plan your minimum required distribution for this year or 2020, 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.
Please contact Dan Murphy at Dan.Murphy@dignityhealth.org for more information.
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