IRA Rollover Gifts

On August 17, 2006 President Bush signed the Pension Protection Act of 2006 (PPA 2006).  After twenty years of effort by a coalition of charities, the new law permits donors to make current gifts from their IRA through "Qualified Charitable Distributions".

NOTE: On May 21, 2008, the House of Representatives approved H.R. 6049, the Energy and Tax Extenders Act of 2008, which would extend the IRA Charitable Rollover, as included in the Pension Protection Act of 2006, through December 31, 2008.  - You must check with your tax professional to determine whether this proposal has been signed into law.

For donors who are age 70 ½ or older, you can now ask your IRA Custodian to distribute up to $100,000 to the ministries you care about, and not be taxed.

These Rollovers may be made during the balance of 2006 or 2007 and may be made in any amount up to $100,000.

Here is how it works:

 The Requirements & Limitations:

• IRA and ROTH IRA holders age 70 ½ or older

• Qualified Charitable Distributions to all charities are combined in considering the $100,000 limit each year.

• Must be sent from your IRA Custodian directly to your Charity to avoid being included in your income for the year.

• This provision is scheduled to expire on December 31, 2007

You Might Consider this if you are:

• Looking for Convenience in your giving:  

  For years, donors have been taking distributions from their IRA to facilitate their “End-of-the-Year Giving”.  These distributions have been taxable, and added to the “charitable deduction” on their tax returns.

  Now, the distributions can be eliminated from the income tax calculation.

• Concerned about effecting your Social Security Earning Amount:

  A person who is receiving Social Security has limits on the amount of taxable income they can receive before their SSI becomes taxable.  Usually this happens when taking an IRA required distribution that increases income to a level where 85% of his or her Social Security is taxable. By using the Qualified Charitable Distribution, his or her income may be lower and should not affect the amount of Social Security payments that are taxable.

• Required to take "Minimum Distributions" from your IRA:

  As we reach the age of 70 ½, the IRS wants to make sure that they begin recapturing some of the income tax that you never paid on the money going into your IRA.  That is why they require that age 70 ½ you begin receiving what they call "Minimum Distributions".  Under the new law, the amount distributed to a qualified charity can offset the amount that needs to be taxed.

How to Make This Type of Gift

• Contact Your IRA/ROTH IRA Custodian: 

  Ask them for the forms required to distribute funds from your IRA/ROTH IRA.  This is something they do all the time, and the only difference is that now, you will not have to include the amount distributed in your income tax calculation. 

 NOTE:  The purpose of this fact-sheet is to give you a general idea of how a Qualified Charitable Distribution might be used.  You should discuss its use with your tax and financial advisors before making a final decision.

If you would like further information Qualified Charitable Distributions, a representative from the Ministry Support Office will be happy to assist you.  Please contact us by calling 562-591-1292 or Contact The Ministry Support Office.  Your inquiry places you under no obligation.

If you choose to include the Long Beach Rescue Mission Foundation in your Will or Living Trust, would you please notify us by completing the estate intention form?  We would like to express our sincere appreciation for your support.

Return to the contact page or to the Ministry Support home page.

Please note, individual financial circumstances will vary. The information on this site does not constitute legal or tax advice. Donor stories and photographs are for purposes of illustration only. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. Use of this site signifies your agreement with the terms of use. The content in this Ministry Support  section has been developed for Long Beach Rescue Mission Foundation by Dan Mirgon & Associates, Inc. Please report any problems to webmaster.

Revised: June 24, 2008