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Because the funds transferred from your IRA are not subject to income tax upon withdrawal, there is no charitable deduction allowed. Even so, a close look at the numbers suggests that almost everyone who qualifies is a winner.




Resources Home > Ways to Give > Kinds of Gifts > Outright Gifts from IRA Accounts

IRA

Three Questions for You
Diagnose Your Own Situation
Tools for Successful Charitable IRA Fund Transfers


Three Questions for You
  1. Do you want to make an outright gift to Wellesley?

  2. Are a lot of your assets tied up in an IRA?

  3. Are you, or will you be, at least 70 and a half years old in 2009?

If you answered yes to all three questions, thanks to the Emergency Economic Stabilization Act of 2008, you can make an outright gift from your IRA account to a qualified charity of up to $100,000 without paying any income tax on the withdrawal. The opportunity expires at the end of 2009.

One important point: because the funds transferred from your IRA are not subject to income tax upon withdrawal, there is no charitable deduction allowed. Even so, a close look at the numbers suggests that almost everyone who qualifies is a winner.

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Diagnose Your Own Situation

  • Do you have a large IRA account?
    This is a great opportunity to make a charitable gift in 2009 without incurring additional income tax.

  • Are you unable to itemize your deductions for income tax purposes?
    By taking advantage of this temporary IRA provision, you can transfer funds directly from your IRA to a charity with no income tax liability, thus eliminating the taxes you would otherwise pay.

  • Is the required Minimum Distribution from your IRA more income than you currently need?
    Consider transferring the remaining distribution to charity. Why? You can still meet your Minimum Distribution Requirement by taking only the portion of the distribution you need for income, and then transferring the remainder of the distribution to the charity of your choice.

  • Have you made a lot of charitable gifts this year and have bumped into the 50% ceiling in your adjusted gross income?
    You can now make gifts directly from your IRA that will not be subject to this limitation and won't be taxed as a distribution.

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Tools for Successful Charitable IRA Fund Transfers

Below are two suggested form letters that will help you comply with the requirements of the law. These transfers can take a few weeks or more, so do allow ample time for your IRA fund transfers to be processed by your Administrator/Custodian.

  • Sample Request from Wellesley donor/IRA holder to her IRA Administrator/Custodian for a Charitable Distribution from her Individual Retirement Account:

    RE: Request for Charitable Distribution from Individual Retirement Account

    Dear Sir or Madam:

    Please accept this letter as my request to make a direct charitable distribution from my Individual Retirement Account # (Account Number) as provided by the Emergency Economic Stabilization Act of 2008.

    Please issue a check in the amount of $____ payable to Wellesley College (Tax ID # 04-2103637) at the address below:

    Wellesley College
    Resources Office/Gift Processing
    Attn: Debbie Mulno
    106 Central Street
    Wellesley, MA 02481

    In your transmittal to Wellesley, please note my name and address as the donor of record in connection with this transfer. Please copy me on your transmittal.

    (Optional paragraph for requests occurring close to year-end) It is my intention to have this transfer qualify for exclusion during the 2009 tax year. Therefore, it is important that this distribution be postmarked no later than December 31, 2009.

    If you have any questions or need to contact me, I can be reached at (telephone). Thank you for your assistance in this matter.

    Sincerely,


    (Donor/IRA Owner)


  • Sample Letter from Donor Informing Wellesley of Forthcoming Qualified Charitable Distribution from Administrator:


    Wellesley College
    Resources Office/Gift Processing
    Attn: Debbie Mulno
    106 Central Street
    Wellesley, MA 02481

    Dear Debbie Mulno:

    It is my pleasure to inform you that I have requested a qualified charitable distribution from my Individual Retirement Account payable to Wellesley College in the amount of $______ from my plan trustee/administrator, (name of IRA trustee/administrator/custodian).

    It is my intention to comply with the requirements of the Emergency Economic Stabilization Act of 2008 in connection with this gift.

    Accordingly, upon your receipt of payment from my IRA trustee/administrator, please send me a contemporaneous written acknowledgement that states the amount of my gift, that no goods or services were transferred to me by your organization in consideration for this gift, and that my gift will not be placed in a donor advised fund or supporting organization. If you have any questions or need to contact me, I can be reached at (telephone).

    Sincerely,


    (Donor/IRA Owner)

    To send this as an e-mail, contact Debbie Mulno at dmulno@wellesley.edu

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    Date Created: November 1, 2006
    Date Modified: November 2, 2009

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