As you think about your support for IJ this year, you may want to consider a gift from your retirement account thanks to a special provision in the tax code.
When Congress passed new tax legislation in January in response to the so-called fiscal cliff, they extended a provision that allows donors to make tax-free gifts from individual retirement accounts (IRAs). This is good news if you are interested in making a current charitable gift from your retirement assets but have been discouraged from doing so by the income tax penalty.
The updated provision is effective through the 2013 tax year only—that means between now and December 31, 2013, you can help IJ and make a gift from what can be one of your most tax-burdensome assets.
If you are age 70½ or older, you can transfer up to $100,000 tax-free to qualified charitable organizations like the Institute for Justice. A few things to consider:
• Distributions must be made directly from a traditional or Roth IRA. Assets in a 401(k) or 403(b) must first be rolled into an IRA.
• Donations must be outright gifts. Gifts to donor advised funds, trusts, charitable gift annuities and other planned gifts do not qualify.
• While you cannot claim a charitable deduction for IRA gifts, you will not be required to pay federal income tax on any amounts you distribute to qualified charities.
If you would like to make such a gift, simply contact your IRA provider and instruct them to make a direct charitable contribution from your account payable to the Institute for Justice, Tax ID# 52-1744337, at 901 North Glebe Road, Suite 900, Arlington, VA 22203. If you would like a sample letter to send to your provider we would be happy to provide one. Simply contact me at email@example.com or (703) 682-9320 ext. 222.
Please note that IRA administrators don’t always include the donor’s name on distribution checks. If you decide to make a gift to IJ from your IRA, please let us know so that we can identify your gift and thank you properly.
Melanie Hildreth is the Institute’s director of devlopment.