The IRA Qualified Charitable Distribution...A Tax-Savvy Way to Support Willamette University
If you are 70½ years old or older, you can take advantage of a simple way to benefit Willamette University — and receive tax benefits in return — by making your gift to Willamette through your IRA. You may give up to $100,000 annually from your IRA directly to a qualified charity such as Willamette without having to pay income taxes on the money through what's called a charitable rollover gift, or "Qualified charitable distribution (QCD)".
Frequently Asked Questions
Q. Why should I make my gift to Willamette from my IRA?
A. You pay no income taxes on the gift. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.
Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to be 70½ on the date you make the gift.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. A QCD can be made only from an IRA. Under certain circumstances, however, you may be able to roll assets from a pension, profit sharing, 401(k) or 403(b) plan into an IRA and then make the transfer from the IRA directly to Willamette. Please contact your plan administrator to determine whether or not you can make a QCD from your retirement account.
Q. Can my gift be use to satisfy my required minimum distribution (RMD) under the law?
A. If you have not yet taken your required minimum distribution for the year, the IRA charitable rollover gift can satisfy all or part of that requirement. Contact your IRA custodian to complete the gift.
Q. Do I need to give my entire RMD to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your RMD is more than $100,000, you can transfer a portion of it to fund a charitable gift.
Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of $100,000. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
Q. My spouse and I would like to give more than $100,000. How can we do that?
A. If you have a spouse (as defined by the IRS) who is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA, for a total annual household gift of up to $200,000.
Q. How do I make a gift through my IRA to Willamette?
A. First, we recommend you talk with your tax preparer or financial advisor to ensure that your gift to Willamette is made in the way that is most advantageous to you from a tax-perspective. Then, you will need to work with your IRA plan administrator to ensure that your gift is transferred properly to Willamette in order to qualify as a QCD. Finally, please contact the Office of Gift Planning at Willamette University to alert us that your gift is coming! We want to be sure to recognize you for your generous support of our students, and will issue a special tax receipt for you to provide to your tax preparer.
As always, please do not hesitate to contact the Willamette University Office of Gift Planning if you have any questions about your gift.
Cathy McCann Gaskin JD'02
Associate Director of Gift Planning
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.