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Your gift can total up to $100,000. The gift is not included in your gross income for federal income tax purposes. The gift can count towards your required minimum distribution for the year from your IRA.
You do not need the additional income by your minimum required distribution, OR Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR You do not itemize deductions, OR You are subject to income phase-outs on your income tax deductions.
You are 70½ or older at the time of gift. Transfers must be made directly from a traditional IRA account. Funds that are withdrawn by you and then contributed do not qualify.
Suppose John wants to make a gift to Children’s Health Fund. He has $500,000 in his IRA and he wants the contribution to be $20,000. He can transfer the $20,000 to Children’s Health Fund. The $20,000 distributed to Children’s Health Fund will not be subject to federal tax and can be counted toward his annual minimum required distribution.
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 with the IRA Charitable Rollover.
The IRA Charitable Rollover allows individuals age 70½ and older to make direct transfers totaling up to $100,000 per year to 501(c)(3) charities, without having to count the transfers as income for federal income tax purposes.
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