The Gift of a Lifetime: Turning Retirement Accounts into Charitable Good

November 14, 2022

There is good news for community foundation donors in their 70s—and for the communities and causes they care about. The qualified charitable deduction rules allow donors to leverage their giving while reducing their taxes. In 2022, the IRS made it permanently possible to give individual retirement account (IRA) assets to a public charity via a Charitable IRA Rollover (also known as a Qualified Charitable Distribution), which previously was allowed since 2015 through the Protecting Americans from Tax Hikes (PATH).

Benefits include:

  • The gift comes from the donor’s IRA, using pre-tax dollars.
  • The gift amount is excluded from their taxable income.
  • The gift amount can be applied towards this year’s minimum distribution requirements.

As such, our donors can give far more with less! This may be an attractive giving option for donors if they are over 70½ and they are interested in making a significant lifetime gift to support their community right now.

Here Are the Rules:

  • The distribution must be from a Roth or Traditional IRA.
  • The distribution must be made directly from the IRA administrator to a qualifying charity such as California Community Foundation (CCF).
  • Gifts made to a donor-advised fund, supporting organization or private foundation do not qualify.
  • Distributions are limited to $100,000 (with exceptions) per individual per year. Any amount over will be added back to taxable income.

While donor advised funds are explicitly excluded from benefitting from a rollover, there are other funds at CCF that can benefit, including a scholarship fund and a restricted fund. Besides donors creating their own fund, another great option to consider is giving their distribution to CCF for any of its impact funds, such as the:

You and your clients may access our personalized service and local expertise to help your clients address the issues and causes most important to them.

For more information on the Charitable IRA Rollover opportunity, please contact the Planned Giving Team at (213) 239-2310.

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