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Community Foundation of Southern Maryland

Charitable IRA Transfers


President Obama has now signed into law a permanent IRA Charitable Rollover.
The legislation (H.R. 2029, a bill to provide for consolidated appropriations for FY 2016 and to make permanent certain tax provisions) cleared the House yesterday by a vote of 318-109 and the Senate earlier this afternoon by a vote of 65-33.  President Obama signed the measure into law just a few hours after the Senate vote.
H.R. 2029 includes a number of important tax provisions, several of which would affect charitable giving, but most notably would retroactively reinstate the IRA Charitable Rollover provision originally enacted into law in 2006 for all of 2015 and remove any expiration date on the provision, thereby permanently extending the Rollover into the future.  The legislation does not provide any expansion of the current law IRA Rollover provision, however.  

This allows tax-free distributions of up to $100,000 per taxpayer, per taxable year to an eligible charitable organization such as the Community Foundation of Southern Maryland from an IRA held by individuals age 70 1/2 or older. Because the distribution goes directly to a qualified charity, the amount will not be counted as income and will not be subject to income tax.

Using IRA assets to make a gift during your lifetime, as opposed to giving via bequest in your will, enables you to experience the joy of making a major gift.

Sample Scenario:
Mr. Smith, age 75, has accumulated approximately $2,000,000 in his IRA accounts. He has other sources of wealth and has plans to leave a sizable estate to his heirs and charity.

Under this law, Mr. Smith can create a fund at the community foundation to address the causes he cares about most by transferring IRA funds tax free. Mr. Smith can transfer up to $100,000 in 2015. In addition, if Mr. Smith is married, his wife can also make similar gifts from her IRA accounts, impacting the community in ways personal, unique and enduring.

Need Ideas on where to give?

  • Create your named Fund at the Community Foundation, by doing so you are giving to a 501 c3 charitable organization... Choose the following types of Fund: Designated, Unrestricted, Field of Interest or Scholarships;
  • Consider giving to our Foundation Operating Fund and support our Mission
  • Give back to teachers through our GREEN APPLE GRANT FUND - reimburses teachers up to $100 for out of pocket expenses; 
  • If you are a nonprofit and are ready to establish an endowment, let us manage it for you and you concentrate on your mission and use some of these tools in this E-blast to recruit donors; or 
  • Give to any of our existing Funds. 

What Does NOT Qualify for an IRA Charitable Rollover

  • Donor Advised Funds 
  • Private Foundations 
  • Charitable Gift Annuities, Charitable Remainder Trusts, etc.

How To Begin the Rollover Process: 

We recommend that your contact your IRA administrator and ask about that particular provider's procedure to execute an IRA Charitable Rollover. We can also provide you with a sample letter that you can send to your provider to initiate the rollover gift.

To mail a check: Make it payable to CFSOMD and in the memo choose what Fund and mail to: P.O. Box 716, Charlotte Hall, MD 20622; For more information send me an Email, or call 240-670-4483(GIVE).