IRA Charitable Rollover Legislation Information

Considering an IRA Charitable Distribution? Here’s what you’ll need to know.

If you are 70½ or older and have a traditional Individual Retirement Account (IRA), you can make an immediate impact to the congregation through an IRA Charitable Distribution. An IRA Charitable Distribution allows you to make a gift to the Sisters, Servants of the Immaculate Heart of Mary, satisfy part or all of your annual required minimum distribution from your IRA and exclude part or all of that distribution from your taxable gross income, thereby reducing your tax liability.

Please note the Setting Every Community Up for Retirement Enhancement (SECURE) Act, enacted Jan. 1, 2020, raises the Required Minimum Distribution (RMD) age threshold to 72. Taxpayers who turned 70½ in 2019 will be subject to RMDs, but donors who turn 70.5 after Jan. 1, 2020, won’t be subject to RMDs until they turn 72, so 2021 at the earliest. As always, we encourage you to consult with your financial advisor.

For your gift to qualify

  • You must be 70½ years of age or older at the time of your distribution.
  • The transfer must be made from your IRA directly to the Sisters, Servants of the Immaculate Heart of Mary.
  • Your total annual IRA Charitable Distribution gift(s) cannot exceed $100,000 in the calendar year of the gift.
  • Your gift must be made to the Sisters, Servants of the Immaculate Heart of Mary by Dec. 31 in the year you decide to make the gift.
  • Your gift must be outright. Gifts from your IRA to donor-advised funds or life-income vehicles such as charitable gift annuities or charitable remainder trusts do not qualify as IRA Charitable Distribution gifts.

An IRA charitable distribution gift may benefit you

  • As an easy and convenient way to make a tax-free gift from one of your major financial assets. You may also consider renewing or increasing your annual gift with your IRA Charitable Distribution;
  • As an exclusion from your gross income; and
  • By counting toward your required minimum distribution.

Making your gift is easy

  • Before Dec. 31 2020, contact your IRA custodian.
  • Ask that your charitable distribution be made payable to Sisters, Servants of the Immaculate Heart of Mary.
  • Transfers from your financial institution need to include your name and address.

Make the IHM Sisters a beneficiary of your IRA
You may also consider making a charitable bequest of part or all your retirement account to the Sisters, Servants of the Immaculate Heart of Mary. A retirement account bequest is one of the most tax-efficient ways to fund a charitable gift from your estate. By making the congregation the beneficiary of your retirement account, you may reduce or eliminate federal estate and income taxes related to your retirement account at your passing.

When the owner of a retirement account passes away and leaves the retirement account to family members, estate and income taxes on the retirement account may total 60 percent or more of the retirement account assets. You receive a charitable estate tax deduction upon your death when you designate your retirement account to the Sisters, Servants of the Immaculate Heart of Mary. In addition, your estate and your heirs will not report any taxable income related to the retirement account distributed to the IHM congregation upon your death. The account assets received by the sisters are not subject to either estate or income taxes. Your gift to the IHM Sisters can be applied to an area of impact that you designate.

Making Sisters, Servants of the Immaculate Heart of Mary a beneficiary of your retirement account will also qualify you to become a member of The Future of Hope Legacy Society. This society was established to recognize donors who give a gift through their estate plans.