IRA Charitable Rollover

Making an IRA Charitable Rollover Gift to Concordia

  1. Submit this form to your IRA administrator, authorizing them to make a distribution to Concordia University, Nebraska
  2. Your IRA funds will be transferred to Concordia.
  3. We will provide you a letter of acknowledgement when they are received.
  4. Your gift will be put to work equipping students with a Christ-centered education to learn, serve and lead in the church and world!

Advantages of Making an IRA Charitable Rollover Gift

The IRA rollover provision allows those age 70 1/2 to make gifts directly from their IRAs in a tax advantageous manner. This allows IRA owners who have attained age 70 1/2 to distribute money directly from the IRA to qualified ministries, like Concordia. Total annual rollover from all IRAs cannot exceed $100,000 for an individual. Spouses can each give up to $100,000 with IRA rollovers.

Making an IRA rollover, as opposed to a normal charitable gift, has two main advantages. First, the rollover counts toward satisfying your required minimum distribution (RMD) for that year. Second, the distribution is excluded from your taxable income. It is this second advantage that greatly benefits under the new tax bill. With very few individuals expected to itemize (some estimates say around 5% of filers), the income tax deduction for contributions to ministry will be lost for many donors. However, if you make an IRA charitable rollover, you get a full exclusion of that income from taxes. So, if you are 70 1/2 or older, own an IRA, and are mission-minded, an IRA charitable rollover can really work out as a way to preserve an income-tax-reducing charitable deduction under the new tax law.

Key Information about IRA Charitable Rollovers

  • IRA owners must be at least 70½ years old at the time the gift is made.
  • The gift must come from an IRA (401K and 403B accounts are not eligible, however, you may be able to roll one of these accounts into an IRA).
  • You can make “qualified charitable distributions” of up to $100,000 ($200,000 per couple) to exempt organizations.
  • The IRA distribution must be made payable to the exempt organization (not to you) in order for the distributed funds to not be reported as individual income to the IRA owner.
  • Gifts given in this way also count toward required IRA minimum withdrawal amounts for the year of the gifts.

IRA Charitable Rollover Gift Example

John and Ann, both retired and in their seventies, give generously each year to their congregation and several charities. Their annual charitable giving usually amounts to $17,000. In prior years, they have itemized their deductions on their tax return. Their charitable giving makes up the largest category of their itemized deductions, while their other itemized deductions only total $6,000 (total itemized deductions of $23,000). Because the standard deduction amount has increased to $24,000, it is unlikely that they will continue to itemize. 

John and Ann decided to use a charitable rollover from his IRA to donate the same $17,000 to their congregation and several charities (John is required to take more than $17,000 from his IRA as a required minimum distribution). As a couple, they receive a standard deduction of $24,000, plus exclude the $17,000 from the rollover from income, resulting in a tax benefit of $41,000 against their adjusted gross income. 

IRA Rollover Tax Savings Comparison

Gifts Not Using the IRA RolloverGift Using IRA Rollover
$0 IRA Rollover Gift $17,000 IRA Rollover
$23,000 Other gifts/deductions $6,000 Other deductions
   
$23,000 total itemized deductions $23,000 itemized deductions
$24,000 Standard Deduction* $24,000 Standard Deduction
$0 IRA income excluded from tax return $17,000 IRA income excluded from tax return
$24,000 Total Tax Benefit $41,000 Total Tax Benefit

For more information on the new tax laws, review this document from our partners at the LCMS Foundation.

Contact us if you have questions or need help making a gift.

Craig D. Stirtz, CFRE
Gift Planning Counselor
Concordia University, Nebraska
402-616-0312
Craig.stirtz@cune.edu