Giving to nonprofits like Sunset Senior Communities is a way to make a Kingdom impact through your retirement assets. If you are 70 and six months or older, you can give to the Sunset Legacy Foundation from your IRA and receive significant tax benefits in return.
Benefits of Giving From Your IRA
Making a charitable distribution from your IRA is a convenient way to give to your favorite charity.
Tax-Wise. Charitable distributions reduce your taxable income. This benefits you even if you don’t itemize deductions on your tax returns.
Promises Kept. Gifts from your IRA can be used to fulfill any charitable giving pledges you previously made.
Impactful. Gifts are tax-free to the charity so the entirety of your gift will go toward ministry!
Qualified Charitable Distribution Requirements
You can give to the Sunset Legacy Foundation from your IRA without any federal tax liability as long as the gifts are qualified charitable distributions (QCDs). Distributions qualify for all or part of an IRA owner’s required minimum distribution (RMD).
- IRA holders must be age 70 ½ or older at the time of the gift.
- You may give up to $100,000 per year as a single person or $200,000 per year as a married couple from separate accounts (this limit will be indexed for inflation beginning in 2024).
- Distributions to donor-advised funds are not permissible.
- Distributions may be made from IRAs, including a traditional IRA, inherited IRA, SEP IRA (inactive), or simple IRA (inactive). Other retirement accounts are not eligible.
Frequently Asked Questions About Charitable Distributions
1. Do I receive a deduction for my gift?
No. Because the IRA assets haven’t been taxed, no deduction is allowed. To receive the deduction, you would be required to first treat the distribution as taxable income before taking the deduction. In most cases, it is better not to take the distribution as income.
2. How do I make a gift from my IRA?
Simply contact your IRA plan administrator and request forms to make a charitable gift. Your administrator may even provide you checks you can write out for qualified charitable distributions directly from your account.
3. Can I give from my IRA to fund a life income gift?
Yes. As of January 2023, you can give a one-time qualified charitable distribution (or multiple QCDs within a single year) totaling no more than $50,000 to fund a life income gift.
4. What’s my deadline for end-of-year giving?
If your gift is coming directly from your IRA administrator, you must complete your paperwork in time for your administrator to send a check to the charity on or before December 31.
If you have an IRA checkbook, your check must be received and processed by December 31. It is not enough that personal IRA checks are postmarked or even hand-delivered by December 31.
Bottom line, your gift must be received and processed by December 31 in order for it to count toward your RMD.
Furthermore, since IRA checks do not include your name and look very similar to standard bank checks (which have different guidelines), it’s a good idea to alert the charity when giving in this manner.
If you want to learn more about IRA gifts or other impactful giving options, contact Jim Steenbergen at 616.214.4505 or email sunsetdevelopment@sunsetmanor.org.