IRA Charitable Gifts

Now it’s easier than ever to make the gift of a lifetime. IRAs can qualify for tax-free charitable distributions.

The Community Foundation of Greene County can help turn your individual retirement accounts (IRAs) into tax-saving charitable gifts. Extended tax benefits allow more people to experience the joy of giving during their lifetimes.

IRA Qualified Charitable Distribution Packet

You can give more for less.

American seniors can make the gift of a lifetime by giving their IRAs to charity without federal tax penalty. So your retirement funds can go further than ever before.

For years, estate planners have recommended that retirement assets may be the most tax-effective asset in larger estates to distribute to charity. These assets are not only vulnerable to heavy taxation as part of an estate but also can be taxed again as income in respect to a decedent on the tax returns of heirs.

Retirement assets may be a preferred charitable gift for seniors. IRA distributions to charity can receive special tax advantages. Americans age 72 and up (or who were 70-1/2 before December 31, 2019) can make tax-free IRA contributions to public charities such as your community foundation.

You can make a difference.

The Community Foundation of Greene County can help you connect to the causes you care about most. You can set up a charitable fund in your name or make an unrestricted gift. Giving is one of life’s pleasures; we can help you enjoy it today.

By giving through your community foundation, you can use your gift to meet ever-changing community needs—including future needs that often cannot be anticipated at the time your gift is made. Your gift can target the causes and programs you care about most.

The Community Foundation of Greene County understands our community’s most pressing issues and can help you establish a fund to make an impact in areas of need or opportunity that are important to you.

Here are four great ways to turn your IRA into community good:

Unrestricted Fund —Meeting ever-changing community needs.
- Address a broad range of current and future needs. The Community Foundation of Greene County evaluates all aspects of community well-being—arts and culture, community development, education, environment, health and human services—and awards strategic grants to high-impact projects and programs.
Field of Interest Fund—Connecting personal values to high-impact opportunities.
- Target gifts to the cause most important to you: arts, education, health environment, recreation, economic development, youth welfare and more. The Community Foundation of Greene County awards grants to community organizations and programs addressing your special interest area.
Designated Fund—Helping local organizations sustain and grow.
- Support the good work of a specific nonprofit organization—a senior center, museum, your church, or any qualifying nonprofit charitable organization—by creating a specially Designated Fund. The community foundation will invest your gift for long-term growth and issue grants to your favorite nonprofit on a regular basis.
Scholarship Fund-Help students access educational opportunities.
- Provide scholarships for students to attend school from Pre-Kindergarten though Post-Secondary schools and help them achieve their educational goals leading to success school and employment.

To learn more contact Bettie Stammerjohn at, cfgcpa@gmail.com.

Frequently Asked Questions about Charitable IRA gifts

Why do donors want to give IRA assets to their community foundation?

After decades of deliberate saving, some of today’s retirees have more money in their IRAs than they need for daily living expenses and long-term care. For larger estates, a good portion of IRA wealth goes to estate taxes and income taxes of non-spousal beneficiaries; heirs may receive less than 50 percent of IRA assets passed on to them through estates.

Instead, IRA holders may choose to leave their IRAs to qualified charitable organizations—choosing charity over taxes.

Which donors stand to benefit most from giving their IRAs to charity?

Because charitable IRA transfers are not included in taxable income and not available for itemized charitable deductions, these special rules may benefit many different types of individuals:

Generous donors—When making a major gift, some taxpayers may give more to charity than they can deduct that year. Donors cannot deduct more than 60 percent of their income for gifts of cash to public charities (30 percent, if giving to private foundations). Although amounts over 60 percent can be carried forward and deducted in future years, taxpayers will face an immediate tax bill and may lose some of the benefit of the deduction if they die before the gift has been fully deducted. Donors who consistently give above the limit will not be able to take advantage of the carry forward provisions.
Non-itemizers—Donors who regularly give a portion of their income to charity are not able to enjoy a tax break from the contribution because the standard deduction is still greater than the total of all itemized deductions. This may be especially true if state and local income taxes are low.
Financially comfortable—Individuals or couples who distribute the minimum from their IRA—and have other forms of income to pay living expenses—may find that transferring their minimum distributions to the community foundation helps fulfill personal charitable goals, tax-free.

What are the advantages of this giving tool?

The tax benefits now available to American seniors will encourage new contributions from individuals who will no longer have to pay tax on a charitable gift of IRA funds. When given through a community foundation, these contributions can support all aspects of community well-being: arts and culture, economic development, education, environment, health and human services, neighborhood revitalization and more.

Now it is easier than ever for more people to enjoy the experience of making the tax-free gift of a lifetime using their excess retirement assets.

What if a donor contributes more than $100,000 from an IRA?

Because the amount that the donor is able to exclude from income is limited to $100,000 under the act, the remaining amount would be recognized as income. Within a married couple, each person can transfer $100,000 from his or her account.

Donors may choose to contribute additional amounts to charity; however, the extent to which additional amounts can be deducted from their income will be determined following general rules of itemized deductions where the charitable percentage limitations and itemized deduction reduction are factors.

Does a donor also receive a charitable deduction when he or she transfers assets to a charity under this provision?

No. The benefit under this provision is that the individual does not realize the amount contributed directly from the IRA to a qualifying charity. Because a donor does not include the amount in his or her gross income, the individual may not take a charitable contribution deduction for the contribution. To do so would allow a donor to receive a double benefit from the contribution. For this reason, charitable contribution deductions are explicitly prohibited.

How will charitable distributions affect the minimum required distributions from a taxpayer’s IRA?

Shortly after an individual reaches age 72 (or turned 70-1/2 before 12/31/2019) he or she is generally required to receive distributions from his or her traditional IRA. Distributions from an IRA to a charity will receive the same treatment as distributions to the individual taxpayer for the purposes of minimum required distributions.

Are there any IRA transfers to the community foundation that do not qualify for preferred tax treatment?

Yes. Transfers to Supporting Organizations and Donor Advised Funds do not qualify. In addition, split interest gifts, such as Charitable Annuities, Charitable Lead Trusts and Charitable Remainder Trusts, do not qualify. Further, an individual may not receive a benefit in return for an IRA distribution.

Because such transfers do not count as qualified distributions under these special rules, the donor will have to first recognize those distributions as income. The donor’s charitable deduction must then be calculated as a regular itemized deduction.

How can an IRA gift be made?

IRAs are typically held by a financial service or trust company. These custodians will likely provide a form that could be used to transfer the IRA directly to charity, with no tax incurred.

The information provided here is based on analysis of recent legislation. Every effort has been made to ensure accuracy of the answers to these questions. However, due to the complexity of the tax law and the fact that many of these provisions introduce issues that are new to the Internal Revenue Code, this information may be subject to change. It is not a substitute for expert legal, tax or other professional counsel and we strongly encourage donors to work with their professional advisors to determine the impact of this legislation on their particular situations. This information may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.

To determine the method, or mix of methods, that make the most sense for structuring a gift through the Community Foundation of Greene County (Pa), this information should be reviewed with a competent financial, tax or estate planner.

The Community Foundation of Greene County (Pa) does not actively seek donations from outside of Pennsylvania. All information on this website related to seeking donations to The Community Foundation of Greene County (Pa) is void where prohibited by law.

The Community Foundation of Greene County is a nonprofit 501(c)3 organization that develops, manages and distributes funds for charitable purposes in the community. The official registration and financial information of the Community Foundation Greene County may be obtained from the Pennsylvania Department of State by calling toll-free, within Pennsylvania, 1-800-732-0999.

FLORIDA CHARITABLE REGISTRATION #CH54865. A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE (800-435-7352) WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL OR RECOMMENDATIONBY THE STATE.