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Charitable IRA rollover

Anytime in 2013 – You can give surplus funds from your IRA . . .

. . . For the Annual Fund

. . . To restore the Hoffbauer murals

. . . Or to fund anything VHS needs to do!

(Thanks to the Taxpayer Relief Act of 2013)

The familiar IRA charitable rollover is back.  First enacted in 2006 and effective in most years since, this law allows owners of traditional IRAs to direct up to $100,000 from their IRA to qualified charities like the VHS, without having to recognize these distributions as income for tax purposes, if:

  • The account owner is at least age 70½ , and
  • The IRA distribution goes directly from the IRA to the VHS without passing first to the donor.


Remember how the IRA rollover works: 

Mary, age 75, has a $500,000 IRA and wishes to make a major gift (or fulfill a pledge commitment) to VHS. Under the new law, she can instruct her IRA administrator to transfer up to $100,000 from her IRA directly to the VHS.

Mary cannot claim a charitable contribution deduction for this gift, but neither must she report this $100,000 distribution on her federal tax return — perfect for Mary, who does not itemize deductions. If Mary has a spouse age 70 ½ or older, he can make a $100,000 dollar gift from his IRA in 2013 as well.

And while this gift of IRA funds brings no charitable deduction, other tax benefits include:

  • the satisfaction of using IRA funds to give to VHS, without any tax liability,
  • speeding the distribution of any tax-free funds in the account, 
  • counting the gift toward the minimum distributions required from an account for that year, and
  • preventing any additional tax on social security income. 

To say nothing of the satisfaction of using IRA funds to help the VHS, without the tax liability of most IRA withdrawals.

Some of the above information refers to American Taxpayer Relief Act, signed into law January 2, 2013.  The contents of this notice are intended as general educational information only, and not to constitute legal or financial advice of any kind.