Are you 70 1⁄2 or older? You may be able to make gifts using your qualified retirement plan.
Please consult your accountant to get professional advice for your specific situation. For additional information or instructions, please contact Beth Schuman at 612-781-2766, ext. 1006 or Beth@NativityChurch.org.
Requirements:
Eligibility
You must be 70 1⁄2 years or older.
Only traditional taxable IRAs are eligible for gifting.
Recipients need to be qualified 501(c)(3) public charities.
Gift Availability
Individuals may directly transfer up to $100,000 annually to a qualified public charity.
Married couples who each have an IRA can give up to $105,000 from each.
The check must be made payable directly to the charity, not the IRA owner.
Qualifications for IRA (QCD)
Needs to be an outright gift with no benefits coming back to the donor.
Can be used to fulfill a pledge. Cannot be transferred to a private family foundation or a
donor advised fund, or used to establish a life income gift.
Benefits:
No Taxes
While taking a Required Minimum Distribution is a taxable event, a Qualified Charitable
Distribution is NOT taxable. A Qualified Charitable Distribution also does not contribute to
the taxation of your Social Security benefits if your level of income subjects you to such
taxes.
Gift Anytime
You can make these gifts at any time of year, and don’t have to wait until year-end to take
your IRA required minimum distribution.
Tax Benefits
You will get a tax benefit whether you use the standard deduction or itemize your
deductions.
The adjusted gross income limit does not apply to qualified charitable distributions which
allows for a larger gift to be made to the charity.
How to Proceed:
STEP 1: Check with your tax advisor to see if a gift from your IRA is appropriate for your
situation.
STEP 2: Contact your IRA custodian to obtain any forms required and follow their instructions.
Note: If your IRA custodian does not have a specific form, below are sample letters to
assist you.
STEP 3: Let the church know you are intending to make a rollover distribution from your IRA.
Making a Gift to the Church from Your IRA:
Sample Letter of Instruction to IRA Custodian:
Date
IRA plan administrator and address
RE: Qualified Charitable Distribution from IRA
Dear Sir or Madam:
Please accept this letter as my request to make a direct charitable distribution from my
Individual Retirement Account ACCOUNT NUMBER as provided in the Consolidated
Appropriations Act of 2016.
Please issue a check in the amount of $ AMOUNT payable to Nativity Lutheran Church
and mail it to:
In your transmittal to the charity, please list my name and address as the donor of
record in connection with this transfer. Please copy me on your transmittal. I can be
reached at (Phone Number) if you have any questions. Thank you for your assistance in
this matter.
Sincerely,
Donor name and contact information
Sample Letter of Instruction to Charitable Organization:
Date
Nativity Lutheran Church, 3312 Silver Lake Road, St. Anthony, MN 55418
RE: Qualified Charitable Distribution from IRA
Dear Nativity Lutheran Church:
It is my pleasure to inform you that I have requested a qualified charitable distribution
from my IRA with IRA CUSTODIAN NAME, payable to Nativity Lutheran Church in the
amount of $ AMOUNT. It is my intent to comply with the requirements of the
Consolidated Appropriations Act of 2016. Please use my gift for the Building Belonging
capital campaign.
I will await your acknowledgment with the date of my gift, the name of my IRA
custodian, the amount of my gift, that the gift is a qualified charitable distribution and a
statement that no goods or services were provided in exchange for the gift.
Sincerely,
Donor name and contact information
Additional Information:
Although most IRA custodians transfer IRA rollover funds directly to public charities, some IRA
custodians issue a check payable to the charity but send the check to the IRA owner for
forwarding to the charity. This transaction still qualifies under the law as a QCD if the check is
issued payable to the charity and you deliver the check prior to December 31st.
Even though an IRA rollover is not included in taxable income and consequently, there is no
income tax deduction, an IRA rollover donor must still comply with substantiation
requirements under the federal tax code. Charity recipients should assist with this by providing
an acknowledgment letter specific to the IRA QCD.