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IRA Rollover Legislation


PIC

From the Desk of Ray Pagels:

Christian Gift Planning Counselor
St. Peter Lutheran Church

IRA Rollover Legislation Extension

The Senate has approved the Charitable IRA Rollover provisions again for 2014, retroactive to January 1, 2014.  In the tax code these distributions are referred to as “Qualified Charitable Distributions.”  Contact me if you have any questions about this form of giving to St. Peter Lutheran Church and any of your other favorite ministries.  This is a tax-wise way of giving that will increase your gift to ministry.  Here are the general rules related to Qualified Charitable Distributions.

Basic Requirements:  Who can do this?  The individual must be at least 70 ½ years of age.  This should not be confused with the IRA distribution requirements that start in the year following the year in which an individual turns 70 ½.  They must be 70 ½ now.

What Kinds of Retirement Plans are Included?  The rollover must be from an IRA or a Roth IRA.  It cannot be done from a 401(k), 403(b), Keogh, or other qualified plan.  Typically, an individual can roll over amounts from these plans to an IRA, and that step will be necessary if they wish to do this.

What is the Maximum Amount?  The amount cannot exceed $100,000.

What about the Minimum Required Distribution?  A Qualified Charitable Distribution can include the Minimum Required Distribution (MRD).  So, for example, if Joe has to take a MRD of $20,000, and instead makes a Qualified Charitable Distribution of $20,000 to St. Peter Lutheran Church, he has fulfilled the MRD requirements and does not need to take that distribution as well.

How Should these Gifts be Made?  The administrator or custodian of the IRA should make the check payable to the charity and deliver the check directly to the charity.  They should not make the distribution to the IRA holder and let the holder deliver funds to the charity.  If they do, this cannot be treated as a Qualified Charitable Distribution.

What Kind of Organization can Receive this Rollover and What Kind of Restrictions are Involved?  It must be an outright gift—it cannot be to a charitable remainder trust, gift annuity, pooled income fund, donor advised fund, or supporting organization.  (Note:  St. Peter Lutheran Church can receive IRA rollover distributions.)

Procedure for Making this Type of Gift:  You must contact your IRA custodian in order to make arrangements to do this.  There is no universal format, but they will want something in writing from you to authorize the Qualified Charitable Distribution.  Please send the information to St. Peter noting the identity of your custodian, the amount you are giving from the IRA, and any designation you wish to make on the use of your gift.

If you would like more information on how this type of gift could work for you, contact me at 224-387-3857 or rpagels@FullLifeinChrist.org.