For many individuals aged 70 ½ or older, an IRA Charitable Rollover is a tax-wise way to support Fort Schuyler’s students. If you are required to make annual minimum withdrawals from an IRA account, these otherwise taxable distributions can satisfy your annual Required Minimum Distribution and thus reduce your taxable income.
The process is simple. In lieu of receiving a Required Minimum Distribution, you direct your financial administrator to make a “Charitable Minimum Distribution” to SUNY Maritime Foundation – it lowers your federal taxable, and while it isn’t deductible you still have the advantage of the standard deduction. It is important to consult with your financial advisor to be sure this approach fits into your financial plan.
- You must be 70 ½ or older at the time of the gift.
- The transfer must be made directly to SUNY Maritime Foundation by your IRA administrator from a traditional IRA account. If the distribution is sent to you it will be taxable income.
- Gifts must be outright, and may not be directed to life income planned gift vehicles.
- Gifts from 401k, 403b, SEP, and other plans do not qualify.
- Tax-free gift transfers can total up to $100,000 annually.
- The gift can be applied to your annual Required Minimum Distribution (RMD) for the year in which it is made.
- The gift is made using “pre-tax dollars” – the transfers are excluded from your gross income for federal income tax purposes.
Mike is 71 and wants to make a leadership gift to his 50thReunion Gift Fund at Fort Schuyler. He has $550,000 in his IRA and has to take a RMD of $20,755. and he wants to make a contribution of $20,000.
- He contacts the administrator of his IRA and authorizes a charitable gift distribution paid directly to “SUNY Maritime Foundation”, and the remaining RMD to himself.
- The IRA charitable transfer is excluded from his federal gross income. Avoiding this income may have kept him from moving into a higher tax bracket.
- The gift is not deductible since it wasn’t income, but he still qualifies for tax savings with the new, higher standard deduction.
- His gift is used to directly impact the education of today’s Maritime College students, and places him in the ‘President’s Circle’ level of the “Admiral’s Council.”
To initiate the transfer, contact your IRA administrator.