Turning Retirement Accounts into Charitable Good

Donors can give IRA assets to charity,
free from federal tax, annually.

There is good news for community foundation donors in their 70s—and for the communities and causes they care about. A recently made permanent law makes it possible to give individual retirement account (IRA) assets to charity, free from federal tax, annually. Prior to 2006, all lifetime distributions from IRAs were taxed—even those given to charity.

As such, donors can give far more with less. This may be an attractive giving option for you if you are:

  • Over 70½ and receiving minimum IRA distributions but do not need the extra income.
  • Interested in making a significant lifetime gift to impact your community.

The Pension Protection Act of 2006 permitted individuals to roll over up to $100,000 from an IRA directly to a qualifying charity without being taxed. On December 18, 2015, Congress passed the PATH Act, making permanent this unique charitable giving opportunity. Single and married individuals 70½ and older are eligible to give in this way from their individual retirement accounts.

Using IRA assets to make a gift during your lifetime, as opposed to giving via bequest in your will, enables you to experience the joy of making a major gift.

For more information on the charitable giving legislation and the Charitable IRA opportunity, please contact Jan Campbell at (805) 963-1873 or jcampbell@sbfoundation.org.

Posted: December 22, 2015

North County Headquarters:  (805) 346-6123  |   2625 S. Miller Street, Suite 101, Santa Maria, CA 93455
South County Headquarters:  (805) 963-1873  |  1111 Chapala Street, Suite 200, Santa Barbara, CA 93101