Chicago Botanic Garden

General Information

Consider a Qualified Charitable Distribution

Congress included a provision in the American Taxpayer Relief Act of 2012 which allows some individuals to withdraw funds from their IRAs and make a gift to charity without penalty. Some facts about the provision are:

  • The provision applies to traditional or Roth IRAs only, not 401(k)s or 403(b) accounts.
  • The gift must be a direct transfer from the Individual Retirement Account (IRA) to the charity (i.e., the check for the gift is made out directly to the charity, not from the IRA provider to the donor).
  • The IRA owner (the donor) must be age 70½ or older.
  • The IRA owner may transfer up to $100,000.
  • The transfer is not included in taxable income.
  • The transfer qualifies for the IRA owner's required minimum distribution.
  • The transfer may be used to fulfill a pledge.
  • The IRA custodian may transfer the funds by check or electronic transfer directly to the charity. Alternatively, the IRA custodian may issue a check payable to the charity but send the check to the donor for forwarding to the charity.
  • Transfers to donor advised funds do not qualify.
  • The gift is not included in taxable income and consequently there is no income tax deduction. However the donor must still comply with substantiation requirements by obtaining a receipt for the gift from the charity.
  • To make a gift of this type, the donor should contact his or her IRA provider.

Special notes regarding gifts made in January 2013:

  • For IRA gifts to charity completed by those over age 70-1/2 made in January 2013, such gifts will be deemed to have been made in 2012.
  • Taxpayers who took a withdrawal (mandatory or otherwise) from the IRA during December 2012 may make a cash contribution of all or part of the amount of the withdrawal up to $100,000 before January 31, 2013 and treat the gift as if it had been a direct distribution to charity that qualified as an IRA gift for 2012.
  • Individuals who take advantage of either of the opportunities above may then make another IRA gift (or gifts) to charity up to $100,000 during the remaining months of 2013. A generous person could then make two gifts of $100,000 in 2013.

 

For more information about making your Qualified Charitable Distribution to the Chicago Botanic Garden, please contact Patty Shanahan, director of planned and major gifts, at (847) 835-6838 or .

Please consult your financial advisor before making any distributions from an Individual Retirement Account. This information does not constitute legal or financial advice.