IRA Qualified Charitable Contribution

 

Individuals who are 70 ½ or older may make a “qualified charitable distribution” from their traditional IRA accounts directly to Fay School and exclude that distribution from their gross income calculation for that tax year. Additionally, the amount distributed to Fay through a “qualified charitable distribution” may serve in place of some or all of the “required minimum distribution” (RMD) individuals 70 ½ or older are required by law to take each year before December 31.

 

- Who are required to take minimum required distributions but who do not need the income.

- Who want to avoid the tax implications created by accepting your “required minimum distribution” as income.

- Whose major assets reside in their IRAs and who would like to support Fay School during their lifetimes rather than, or perhaps in addition to, through an estate gift.

- The maximum amount that can be directly transferred to Fay through a “qualified charitable distribution” is $100,000. Any amount up to $100,000 is permitted.

- The distribution must be made by the trustee of the IRA account directly to the School. You as the account owner should not take possession of the funds at any time during the transaction, as that will create the taxable event that the IRA charitable rollover is designed to avoid.

- The giving technique is available only from traditional IRA accounts. Distributions from other types of retirement accounts – i.e., 401(k) and 403(b) accounts – are not eligible for this favorable tax treatment.

If you would like to learn more about this tax-advantaged giving technique, please call the Office of Advancement at Fay School at 508-490-8414 or consult your personal philanthropic or tax advisor. The School stands ready to assist and facilitate your plans to take advantage of this opportunity.