IRA Charitable Rollover / Qualified Charitable Distribution

IRA Charitable Rollover

The IRA Charitable Rollover provides you with an excellent opportunity to make a gift during your lifetime from an asset that would be subject to multiple levels of taxation if it remained in your taxable estate.

To qualify

• You must be age 70 ½ or older at the time of gift.
• Transfers must be made directly from a traditional IRA account by your IRA administrator to Lehigh University. Funds that are withdrawn by you and then contributed do NOT qualify. Gifts from 401k, 403b, SEP and other plans do not qualify.
• Gifts must be outright. Distributions to donor-advised funds or life-income arrangements such as charitable remainder trusts and charitable gift annuities or to obtain other benefits such as tickets to athletics events, do not qualify.

Benefits—qualified charitable distributions

• Can total up to $105,000.
• Are not included in your gross income for federal income tax purposes on your IRS Form 1040 (no charitable deduction is available, however).
• Count towards your required minimum distribution, if you have one.

Example

Jane wants to contribute to Lehigh University. She is 73* and is required to take a minimum distribution of $20,000 from her IRA but does not need the income. She can authorize the administrator of her IRA to transfer $20,000 to Lehigh. The $20,000 distributed to Lehigh will not be subject to federal tax and will be counted toward her annual required minimum distribution.

*Note that under the Secure Act 2.0, the age at which you are required to make minimum distributions (RMD) was raised to age 73 for individuals born between 1951 and 1959, and age 75 for those born in 1960 or later.

Sample letter

See below for a sample letter you can send to your plan provider to initiate a rollover. Make sure that you contact us when you direct the rollover so we can look for the check from your IRA administrator.

Sample transfer instructions for qualified IRA gifts to Lehigh

Name of Account Owner/Donor
Address
City, State ZIP
Phone number

Date

Name of IRA administrator
Address
City, State ZIP

RE: Request for Direct Qualified Charitable Distribution from IRA

Dear Sir or Madam:

Please accept this letter as my request to make a direct qualified charitable distribution from my Individual Retirement Account (IRA) #_____________________ as authorized under section 408(d)(8) of the Internal Revenue Code (IRC).

Please issue a check in the amount of $___________, payable to Lehigh University, and send the check to the following address:

Lehigh University
Lorraine Wiedorn ’84G ’13P ’17P
Assistant Vice President Planned Giving and Family Philanthropy
306 S. New Street, Suite 500
Bethlehem, PA 18015

The qualified charitable organization’s federal tax identification number is 24-0795445.

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

It is my intention that this gift complies with IRC 408(d)(8). It is also my intention to have this transfer qualify during the current tax year. Therefore, please be sure to postmark it no later than December 31st.

If you have any questions or concerns regarding this request, I can be reached at [insert your telephone number and/or email address].

Thank you for your prompt attention to and assistance in this matter.

Sincerely,

_____________________________________
Donor Name