A recent column by Jason Alderman in the News and Sentinel, Don't forget mandatory IRA withdrawals, highlights the requirement for individuals who are 70 and one-half or older to take a Required Minimum Distribution (RMD) from their IRA accounts. It did not mention the unique opportunity that a RMD provides to these individuals. They have the opportunity to give up to $100,000 in pretax dollars to charitable organizations each year. One-hundred percent of the money goes directly to charitable organization without the IRA holder having to recognize the money as income.
Individuals of age have an opportunity to make a difference in their communities with the money from their IRA. They can use their funds to provide assistance for specific causes they believe in. Today, with 275 public charities in Wood County and 5,700 public charities in West Virginia, these individuals can help communities. A donation can assist an organization to support an immediate need, or for the long-term, to create a permanent fund that is perpetual serving a specific or multiple organizations and causes. It's up to the individual to determine where the charitable gift dollars will go.
During the holiday season, many individuals look for opportunities to help communities for specific purposes. This is one way to achieve that goal.
Three points to note are that (1) the funds cannot be given to donor advised funds or supporting organizations or private foundations; (2) this vehicle currently must be renewed annually by the federal government; and (3) the gift must be transferred directly from the plan administrator to the 501(c)(3) organization(s) (the donor should not accept the distribution first).
To learn more about this opportunity, visit the IRS's website at www.irs.gov/Retirement-Plans/Charitable-Donations-from-IRAs-for-2012-and-2013 and consult with your tax advisor.
EDITOR'S NOTE: Tres Ross is executive director of Parkersburg-based The Ross Foundation, a philanthropic organization that supports nonprofit groups in Doddridge, Jackson, Pleasants, Ritchie and Wood counties.