Charitable IRA Rollover

Overview

If you are 70½ or older, you can make a tax-free gift directly to Sri Aurobindo Sadhana Peetham (SASP) from your Individual Retirement Account (IRA). The tax legislation permanently establishing this way to give more formally calls it “A Qualified Charitable Distribution” (QCD).

Here’s how it works

Who? You must be 70½ or older to make an IRA rollover gift to SASP.

What? You can give up to $100,000 from your Traditional or Roth IRA. SASP is happy to accept gifts of any amount.

How? Instruct your plan administrator to send a specific dollar amount directly to SASP. (You cannot withdraw the funds yourself.) Your IRA administrator can send the gift by check or electronic transfer. Here is a sample letter to your IRA Administrator. Please let us know if you plan to do this so we can ensure your gift is processed in an accurate and timely manner.

When? Anytime! But your gift must be completed by December 31 in order to receive the
maximum benefits for the current tax year.

Benefits to You

RMD – Your donation will count towards your required minimum distribution (RMD) for the
current year. Under current law, every IRA account holder must withdraw a required RMD
annually beginning at age 72 (age 70 1/2 for those reaching that age prior to 1/1/20). Note
though that under the CARES Act, IRA holders are not required to take their required minimum distribution in 2020. Even so, making a QCD to SASP this year will allow donors to direct any amount, up to $100,000, from their IRA to SASP in a tax-efficient manner.

Tax Savings – You can exclude up to $100,000 of this gift from your federal gross income — resulting in lower taxable income and possible tax savings ($200K exclusion may apply for taxpayers who are married and filing a joint return). Tip: This tax savings is especially valuable to donors who are non-itemizers and donors who have reached their limit on itemized charitable deductions.

Impact – You will have the personal satisfaction of benefiting our Sri Aurobindo community,
maybe more than you may have originally thought possible. Please consult with your financial advisor about this special opportunity. For more information, please contact SASP at: 1-800-735-4691, Ext. 4

Estate Gifts From IRAs Also a Great Idea

While Charitable IRA Rollover Gifts allow donors to further their philanthropic goals and reduce taxable income, designating charitable organizations as beneficiary of IRA, 401(k), pension or other retirement plans also has its benefits. For many years, advisors have been telling clients that IRAs are the very best asset to leave to worthwhile organizations in their estate plans.

See the “IRA, 401(k) plans and other retirement savings arrangements” section on our Estate Planning page for more information.