Skip to main content

Avoid the Frustration by using the IRA Charitable Rollover

By Judy Held

Here’s an idea for Catholics who may be frustrated by the “Required Minimum Distribution” rules if they have an IRA and are at least age 72 or older: Don’t take the distribution.

Instead, have it sent directly to the Church (and/or other favorite charities). That way, you will avoid increasing your taxable income in 2021 and you will make a wonderful charitable gift!

This is often called the “IRA Charitable Rollover”.

Rolling over part or all your IRA’s “required minimum distribution” or “RMD” to a charity, like the Catholic Foundation of Eastern Montana, can help reduce your tax bill while you designate which permanent endowment you want your gift to benefit. It can be for your local parish, Catholic school, ministry of the diocese, or Catholic organization (located in our diocese).

Just be sure to have your IRA administrator send your gift, along with your instructions, directly to the qualified charity. Caution: If the income first comes to you, and then you send it along to the Church or another charity, you will still have to claim it as income. And while your donation to the Church will be tax-deductible, it won’t help you on your taxes if you don’t itemize your deductions.

Making an IRA Rollover Gift is Easier Than Ever

Contact your IRA administrator. Because of the popularity of the rollover, most administrators provide forms and a procedure to help you make a rollover gift. Remember:

  • Those age 70 ½ and older may transfer up to $100,000 from your IRA directly to a qualified nonprofit organization, such as the Catholic Foundation of Eastern Montana, this year.
  • You pay no taxes on the transfer and your gift counts dollar-for-dollar to support the Catholic church, ministry, school or organization of your choice.
  • You can also count the gift against your required minimum distribution (RMD), which lowers your income and taxes this year.
  • You can also establish a legacy with your gift.

Consider having your IRA rollover gift create a “Named Endowment” with the Foundation This endowment could bear your family’s name, ensuring that when you pass, distributions will continue to be made each year — exactly as for what purpose you designate — benefitting the Church forever.

Need more information?

Contact us anytime for more information about using your IRA to fund an Endowment. We are always happy to visit about your interests in helping ensure a vibrant future for the Catholic Church in our diocese!