IRA Charitable Rollover Signed Into Law

By Judy Held, President, Catholic Foundation of Eastern Montana
(Excerpted by permission from Crescendo Interactive, Inc.)

Great News! Congress recently enacted a permanent extension of the IRA Charitable Rollover. As a result, individuals age 70½ or older can now make tax-free gifts directly from their IRA to the Catholic Church and other charities.

If you are 70½ or older, you are likely familiar with the IRA requirement minimum distribution (RMD). Each year, the IRS requires you to withdraw a certain amount from your IRA whether you need the funds or not. And you may pay income tax on every distribution you take. For many IRA account holders, this may be an undesirable annual burden.

The IRA Charitable Rollover provides several advantages. You can benefit from an IRA Charitable Rollover this year and in future years if…
• You wish to make a gift to the Church without using cash or other assets
• You do not need all or a portion of your IRA income
• You are paying too much in taxes and are looking to reduce your income
• You do not itemize deductions (Because a rollover gift can reduce your income and taxes, you can still benefit from charitable giving even as a non-itemizer.)

How an IRA charitable rollover gift works:

1. Contact your IRA plan administrator to make a gift from your IRA to your parish or to the Catholic Foundation of Eastern Montana. Your IRA funds must be transferred directly from your IRA administrator to the Catholic Foundation or your parish.
2. You won’t be taxed on the donation amount you transfer to the Church (you may transfer up to $100,000 total, per year, from your IRA to qualified charities).
3. Your gift counts dollar-for-dollar to support the important work of the Church.
4. Your transfer/gift to the Church counts against your Required Minimum Distribution.
5. Contact us at the Catholic Foundation of Eastern Montana if you wish for your gift to be used for a specific purpose, such as Youth Ministry, Priest Retirement or Seminarian Education. If you do not specify, your gift will be used for the Greatest Needs, which allows much-needed and appreciated flexibility to meet several important needs.
6. Please note that an IRA charitable rollover gift does not qualify for a charitable deduction – the tax benefit comes from rolling your gift directly from your IRA to our charity and, thus, avoiding paying any potential tax on the distribution which would have otherwise been made to you.
For more information, visit with us at the Catholic Foundation of Eastern Montana. We are happy to assist you and answer any questions you may have. (406) 727-6683, ext. 120, 1-800-332-9998, ext. 120 or judy@CatholicFoundationMT.org.