Direct Charitable IRA Distributions
Taxpayers age 70½ or older can make tax-free distributions directly to Missionary Ventures from their IRA up to $100,000 per year through 2011. This is thanks to the Pension Protection Act of 2006 as extended by subsequent legislation.
Under these new rules, taxpayers can transfer IRA funds directly to Missionary Ventures without incurring income tax on the transfer.
The following are the guidelines:
- The donor must be age 70 ½ or older when the contribution is made (you will have to wait until your actual 70 ½ birthday to make the transfer).
- The maximum annual IRA rollover is $100,000.
- The contribution must be a direct gift to Missionary Ventures.
By making an IRA charitable contribution to Missionary Ventures, the donor can bypass the taxes, and also know that the good stewardship is helping to change lives today and for eternity.
The process is a simple one. The donor directs their IRA custodian to make a distribution to Missionary Ventures. The donor then contacts Missionary Ventures to let us know the gift is being made and if there is a particular designation the donor wishes to place on the gift.
There is a sample letter that may be sent to the IRA custodian, directing them to make the requested contribution.
Who might potentially benefit:
- Someone who takes the standard deduction on their federal income tax return.
- Someone who is a Social Security recipient.
- Someone looking for a simple and easy way to make a donation, especially at the end of the year.
- Someone considering making a major gift, but waiting for a favorable opportunity to do so.
- A generous person who wants to give beyond the 50 percent adjusted gross income limitation.
Commonly Asked Questions
Who Qualifies? Donors who are age 70 ½ or older
What is the maximum amount that can be transferred? $100,000
Can gifts be made to any nonprofit organization? No, only those classified as 501(c)(3) charities.
What about donor advised funds, supporting organizations, and life-income gifts such as charitable gift annuities and charitable remainder trusts? No, these do not qualify.
From what accounts can I make a transfer? Funds must be transferred directly from a donor’s IRA to Missionary Ventures. Assets held in 401(k) and 403(b) accounts must first be rolled into an IRA, and then the IRA custodian transfers the funds from the IRA directly to Missionary Ventures.
Can this type of contribution be designated for a particular ministry of Missionary Ventures? Yes, just like any other contribution made to Missionary Ventures, the contribution may be designated as the donor wishes.
Does this transfer count toward the minimum required annual distribution? Yes, the IRA charitable rollovers count toward the minimum required distribution for the year.
How does this affect one’s taxes? For a Federal tax return, the transfer to Missionary Ventures is not recognized as income to the donor if the funds goes directly from an IRA account to Missionary Ventures. The gift does not qualify as an income tax charitable deduction. For State tax returns, a donor will need to consult with their tax advisor since each state has different laws.
Do you have additional questions or need more information? Please contact us:
Missionary Ventures International, Inc.
Attn: Cynthia Williams, CFO
5144 S. Orange Avenue Orlando, FL 32809
Phone: 407-859-7322 Ext. 3007
Please consult your tax advisor before making such a decision; each individual’s situation is unique. Also, check with your advisor regarding possible state tax implications.