How To Give From Your

Individual Retirement Account

To Your Church

If you are age 70 ½ or older, new legislation now allows you to make charitable gifts directly from an Individual Retirement Account (IRA).  A special two year IRA charitable rollover permits individuals age 70½ and older to make direct transfers of up to $100,000 per year in 2006 and 2007 to charities like your church.

 Example: Suppose Mary has $500,000 in an IRA and will be required to withdraw approximately $25,000 this year, and suppose that she also wants to contribute $20,000 to her church.  She can authorize the administrator of the IRA to transfer $20,000 to her church and $5,000 to herself.  The $20,000 distributed to her church will not be subject to tax and will be counted toward her annual minimum distribution. 

How do I know if an IRA charitable rollover is right for me?• You are at least age 70½, AND• You do not need the additional income generated by the minimum required distribution, OR• Your charitable gifts already equal 50% of your adjusted gross income, so you do not benefit from an income tax charitable deduction for additional gifts, OR• You are subject to the 2% rule that reduces your itemized deductions, OR• You do not itemize deductions. 

How do I initiate an IRA charitable rollover?Contact your IRA administrator.  We have provided a sample letter of direction if you would like. Make sure that you also let your church know when to expect your gift and how you would like it designated. 

As with any decision involving your financial or estate plans, we urge you to seek the advice of professional counsel when considering a gift to your church.

 ______________________________________________________________________________________________________

______________

Date

______________________________________

Name of Plan Provider

______________________________________

Address

______________________________________

City, State Zip

Re: Request for Direct Charitable Distribution from Individual Retirement Account

Dear Sir or Madam:

Please accept this letter as my request to make a direct charitable contribution from my

Individual Retirement Account Number #__________________________________ as provided by the Pension Protection Act of 2006.

Please issue a check in the amount of $____________  payable to(name of church) at the following address:

[Name of Church]

[Address]

Attention: [Name of Church Treasurer]

In your transmittal to the charity, please memorialize my name and address as the donor

of record in connection with this transfer, and copy me on your transmittal. It is my

intention to have this transfer qualify during the 2007 tax year. Therefore, it is

imperative that this distribution be postmarked no later than December 31, 2007.

If you have any questions or concerns regarding this request, I can be reached at

_______________________.

(telephone or e-mail address).

Thank you for your prompt attention to and assistance with this matter.

Sincerely yours,

______________________________________________________________________________________________________

Letter from church treasurer on church stationary to donor

DATE

NAME

ADDRESS

Dear ________________,

This is to acknowledge that we received a check dated [DATE] in the amount of _______________ Dollars ($________) from [Plan Administrator] issued on your _____________ IRA account. 

This letter acknowledges that we received your gift directly from your IRA plan administrator and our understanding that it is your intention that your gift qualify as a qualified charitable distribution from your IRA under Section 1201 of the Pension Protection Act of 2006 and Sec. 408(d)(8) of the Internal Revenue Code of 1986, as amended.  In that connection, we warrant to you that the [Name of Your Church].is qualified under sections 170(b)(1)(A)(vi) and 509(a)(1) of the Internal Revenue Code and that your gift was not and will not be transferred to a donor advised fund or to a supporting organization as described in section 509(a)(3).

We further warrant that no goods or services of any value were or will be transferred to you in connection with this gift.

Please retain this letter with your important tax documents and provide a copy to your tax preparer.

Thank you for your generous contribution.  We are very grateful.

Sincerely,