“For the past 6 years I have made my gifts to the EMU university fund, my church and other Christian ministries from my IRA. I ask my IRA custodian to send a check directly to EMU from my IRA. I avoid the income taxes and the gift counts toward my required minimum distribution since I am over 70½. By using my IRA I can get the equivalent of a tax deduction even though I do not itemize my income taxes. I have saved thousands of dollars in federal and state income taxes by doing this. If you are 70½ or older you may want to do the same thing.”
The IRA rollover has not yet been extended to cover gifts made in 2014. If Congress follows what has become its usual pattern, it will pass an extension in late December that will apply through 2015 and be retroactive to January 1, 2014. A temporary extension is included in a tax extenders package introduced in the Senate, and a bill making the rollover permanent was voted out of committee in the House, but there has not been any recent activity on either bill. We are actively monitoring this issue and will let you know as soon as there is any news.
What should you do now?*
If you are considering a gift from your IRA for 2014:
If you are age 70½ or older (on the date of the gift) and itemize your tax deductions, you may want to go ahead and make the gift up to the amount of your minimum required distribution by following the procedure below. If Congress passes the extension and makes it retroactive, you will be able to treat the contribution as a rollover gift. If Congress does not pass the extension (or does not make it retroactive), you will still be able to deduct the gift. Your receipt letter will include language to cover either option.
If you do not itemize or if you are making gifts in excess of your minimum required distribution, you may want to wait to see what Congress will do. If Congress does not pass an extension, you may prefer to make the gift from other resources.
IRA Gift Options
You should consider an IRA Rollover if:
- You take the standard income tax deduction rather than itemizing deductions.
- You do not need the income from the required minimum distribution.
- The additional income from your RMD (required minimum distribution) would result in taxation of your social security benefits or a change in your income tax bracket.
- You would be unable to take other deductions (such as for medical expenses) due to the increased income.
- You have maximized your charitable deductions and/or are subject to the 3% limitation on itemized deductions.
- You are planning to give the IRA to charity anyway.
Rules for 2013
- You must be age 70½ or older when the transfer is made to EMU.
- The gift must be from a traditional or Roth IRA. Gifts from a SEP IRA or other types of retirement accounts are not eligible.
- Checks must be made payable directly to EMU by your IRA custodian. [Caution: Please do NOT have the check issued in your name.] If you choose to also have the custodian mail the check directly to EMU, please let us know since your custodian may send it without including your name.
- The maximum amount you can give to charity from your IRA in one year is $100,000 ($200,000 for couples).
- Your gift must be outright. [For example, it cannot be used to fund a charitable gift annuity or remainder trust.] It may be used to fulfill a pledge.
- The gift cannot be made to a donor advised fund. [IRA rollover gifts must be made directly to EMU and other charities you support, rather than to or through The Mennonite Foundation or a community foundation, as they are not eligible to receive these gifts.]
Other gift information
- Send a letter to your IRA custodian giving them instructions for sending your gift to EMU, 1200 Park Road, Harrisonburg, VA 22802. [EMU’s EIN number is 54-0575812]
- Either send a copy of that letter or a separate notification letter to EMU for our records.
- You may need to allow 2-6 weeks for processing depending on your financial institution.
Questions? If you have questions about whether to make a gift from your IRA, please contact:
Robyn Hill, Director of Planned Giving: 540-432-4971 (office) or
Phil Helmuth, Executive Director of Development: 540-746-2068 (direct line) or
Or call our office toll-free at 800-368-3383 at your convenience.
*This information is intended only as general guidance and should not be construed as legal or tax advice. It is important to check with your tax advisors regarding your specific situation.
Note: This material was updated November 25, 2014.