Making a Charitable Gift through an IRA

BRIDGEPORT– Supporting the Diocese with a gift to the Annual Catholic Appeal or securing a legacy that lasts beyond your lifetime can be made through an IRA.said Pamela Rittman, Director of the Annual Catholic Appeal.

“This is creative way to make a gift to the Diocese of Bridgeport and support programs that reflect your values and beliefs, while meeting your personal goals and providing tax benefits,” said Rittman who also serves as Assistant Director of Development.

Eligible IRA owners can make qualified charitable distributions of up to $100,000 ($200,000 for a married couple who each qualify separately) from traditional IRAs without having to pay federal income taxes on the distributions. These distributions are not tax deductible and must be payable directly to a qualified charity.

“A strategy to consider is to make a federal tax-free charitable distribution from your traditional IRA or rollover IRA. This is a complex strategy and you should consult your tax advisor before making a federally tax-free charitable distribution from your IRA,” she said.

The following guidelines offers a quick introduction and background information for individuals who may be considering making a gift through their IRA.

Who qualifies for this strategy?

  • You must be age 70½ or older at the time of the distribution.
  • You may distribute any amount up to $100,000 per tax year.
  • You and your spouse may make combined distributions up to $200,000, provided each of you owns at least one IRA, and each of you is at least 70½ years old at the time of the distribution and can make a qualified charitable distribution up to $100,000 from your respective IRA accounts.

Where can you direct contributions?
These rules apply for all charitable organizations.

  • The distribution must be paid directly to the qualified charity/Diocese of Bridgeport.
  • Charities must receive distributions for each tax year no later than December 31 of the respective tax year to be considered as a donation to the charity for the year.
  • Donor advised funds and certain private foundations are not eligible charities. Check with your tax advisor to determine whether a charity is qualified to receive an IRA charitable distribution under applicable tax law.
  • You must obtain written acknowledgement of each IRA charitable distribution from each qualified charity recipient to receive the tax-free treatment.

    An acknowledgement IRA gift transfer letter can be found on the Annual Catholic Appeal donation page on the diocesan website, Go to Click Here for More Information about an IRA tax free donation for the link to the letter.

  • You cannot receive any goods or services in return for the IRA charitable distribution.

How do you apply for this strategy?

  • Contact your financial advisor who can help you evaluate and determine if this works with your overall estate plan.
  • Complete any forms from your financial institution and have your financial advisor prepare any correspondence to send to the Diocese of Bridgeport on your behalf.

Can you use the qualified charitable distribution to meet required minimum distributions for the year?

  • Yes, you can use up to the entire $100,000 per person each year. If you have not taken your required minimum distribution (RMD) before the end of the tax year, and you plan to take the RMD as a qualified charitable distribution, you have until December 31 of the respective tax year to make the distribution. The amount distributed as a charitable IRA distribution is included in the owner’s required minimum distribution for the year.

To whom should your distribution check be payable?

  • Your financial institution will make the check payable to the Diocese of Bridgeport. You cannot receive a distribution payable to you and then issue a second check to the Diocese

For more information on making a charitable gift through an IRA or other charitable vehicles, contact Pam Rittman, Diocesan Office of Development – 203-416-1479