December 2010
As part of the new tax legislation, Congress approved the renewal of the IRA Charitable Transfer for 2010 and 2011. This means that if a donor is age 70 ½ or above and has an Individual Retirement Account (IRA), the donor can make a direct gift from his/her IRA funds to CHMC Foundation without any tax liabilities. Under this federal legislation, all the donor needs to do is notify his/her IRA administrator to transfer a specified dollar amount directly from the IRA to the Foundation.
It is a straight-forward process. Here are the basic parameters of this legislation:
1. It is a continuation of the rules that originally were in place only for 2008 and 2009.
2. There is an aggregate maximum ceiling of $100,000 per year. Donors can make several transfers to diverse charities, so long as gifts do not exceed the $100,000 ceiling for each year.
3. If the gifted amounts are equal to or exceed the donor’s Required Minimum Distribution (RMD, the amount that must be taken out each year and is generally fully taxable), the RMD requirement is fulfilled. Many older donors like the fact that they can avoid the problems of the RMD by making an IRA Charitable Transfer.
4. The donor does not receive an income tax deduction or other benefits for this transfer.
5. The transfer must be made to a 501(c)(3) organization
6. There are some allowances for transfers made in January 2011 to count towards 2010.
We encourage you to share this information with friends who may qualify for this renewed tax benefit. Please do not hesitate to contact Susan Shum in the Foundation office at 213.742.5662 if you have any questions or would like further information.
