IRA Charitable Rollover

Gifts Through an IRA: A Special Giving Opportunity for Qualified Donors

 

Support ministries with a gift through the ELCA Foundation

IRA Charitable Rollover is renewed!

The IRA Rollover enjoyed by many charitable donors in 2006 and 2007 has been extended for 2008 and 2009.1 

This means that you can give directly from your IRA to the ELCA–to benefit any or all ministries of the ELCA–without having to first recognize the distribution as income on your tax return.2


What are the requirements?

  • An IRA rollover donor needs to have reached age 70 ½.
  • Up to $100,000 may be transferred from an IRA by December 31 in each year.
  • Married couples who each have an IRA can give up to $100,000 from each IRA by December 31 in each year, thereby giving as much as $200,000 in each year.
  • A recipient charity needs to be a qualified public charity. The ELCA is a qualified public charity. As the gift administrator for the ELCA’s churchwide office, the ELCA Foundation can forward IRA rollover distributions to any ministry that is part of the ELCA, including your congregation.
  • An IRA rollover gift needs to be an outright gift – no benefits coming back to the donor (such as with a Charitable Gift Annuity or Charitable Remainder Trust, or a seat at a fundraising dinner) AND no retaining future distribution decisions (such as with a Donor Advised Fund).
  • An IRA rollover can be made from a regular IRA or a Roth IRA.3 An IRA rollover may be made from a SEP-IRA or a SIMPLE IRA only if the IRA owner has retired and is no longer making contributions.
  • An IRA rollover can be used to fulfill a pledge.
  • An IRA rollover qualifies for the Required Minimum Distribution (RMD) of an IRA owner.


How do I proceed?

  • Check with your tax advisor about whether giving from your IRA is appropriate for your situation.
  • Contact your IRA custodian to obtain any forms they may require and follow their instructions. If your IRA custodian does not have a specific form, please feel free to use the sample letter below. Without going into details about your intentions of how your gift should be used, let your IRA custodian know that you are giving to the Evangelical Lutheran Church in America, c/o ELCA Foundation, 8765 W. Higgins Road, Chicago IL 60631-4101. Allow your IRA custodian to contact us at 773-380-2970 for the ELCA’s federal tax ID number, if they require it.
  • Let us in the ELCA Foundation know that you are intending to make a rollover distribution from your IRA. Please provide information about your IRA custodian and the amount to be received, so we can match paperwork and the check from your custodian. Your communication with us is where you can describe whatever specific ministries should receive the gift of your IRA rollover. We encourage you to use the sample letter below.
  • Although most IRA custodians transfer IRA rollover funds directly to public charities – like the ELCA, some IRA custodians issue a check payable to the charity but send the check to you (the IRA owner) for forwarding to the charity. This transaction still qualifies under the law as an IRA rollover if the check is issued payable to the charity and you deliver the check prior to December 31 of the applicable year. Delivery may be made by physical transfer to a staff member of the ELCA Foundation or by placing the check in the U.S. mail by December 31 of the appropriate year. Our address is ELCA Foundation, 8765 W. Higgins Road, Chicago, IL 60631-4101.
  • Even though an IRA rollover is not included in taxable income and consequently there is no income tax deduction, an IRA rollover donor must still comply with substantiation requirements under the federal tax code. The ELCA Foundation assists in this by providing an acknowledgment letter for the IRA rollover.


What are the benefits of taking advantage of the IRA Charitable Rollover?

  • You can make a tax-favorable gift from an IRA without waiting until the end of life.
  • You can make a year-end gift, especially if you are waiting until year-end to take your IRA required minimum distribution.
  • You can give over and above the 50% AGI limit without having to carry deductions forward into subsequent years.
  • Distributions are not recognized as income, so they do not contribute to taxation of your Social Security benefits if your level of income subjects you to such taxes.
  • You get a tax benefit even if you use the standard deduction instead of itemizing deductions.



Here to help
Our nationwide network of professional gift planning staff can help you explore a variety of possibilities for making a significant gift to ministry and fulfilling your legacy goals at the same time. 

The examples and information on this page are for illustrative and educational purposes only and should not be considered tax or legal advice. Please consult with your tax or legal advisor before proceeding with your estate plan. 


Microsoft Word Sample letter to IRA custodian    

Microsoft Word Sample letter to the ELCA Foundation



1 The 2006 and 2007 rollover provisions are found in the Pension Protection Act of 2006. The 2008 and 2009 provisions are found in the Tax Extenders and Alternative Minimum Tax Act of 2008.

2 This is true for federal income tax returns, but it is possible that your state does not recognize the IRA Charitable Rollover, thereby requiring you to recognize income on your state income tax return and then take a charitable deduction. On the federal return, because no income is recognized, no deduction is taken. It’s a rollover.