Donate Via Required Minimum Distributions

Please Donate Now Via Required Minimum Distributions (RMDs), Stock Contributions and Endowments/Bequests!

December 2017

To All Members of the Temple Beth Am Family,

I would like to remind everyone of three easy ways you (and your friends, relatives or business associates) can help our synagogue endure and thrive as we go forward.

First, everyone who reaches age 70 1⁄2 must start taking “Required Minimum Distributions” (RMDs) from their 401(k) accounts, traditional IRA accounts, rollover IRAs, and certain other accounts. (Note: No minimum distributions are required for Roth IRAs)

Several years ago, Congress passed, and the IRS implemented a temporary measure whereby anyone over age 70 1⁄2 taking RMDs could make a “Qualified Charitable Distribution” (QCD) up to $100,000 annually directly from their IRA by the trustee to a qualified charity. Included in the total amount contributed would be the RMD amount for that year.

In the Fall of 2015, Congress voted to make this temporary measure a permanent part of the tax code.

So, what does this mean to you if you are over 70 1⁄2 or if you have a relative or friend who is over 70 1⁄2? It means simply that instead of taking your RMD personally and having to pay tax on it, you can instruct the trustee to make the direct distribution of any amount (up to $100,000 annually) DIRECTLY PAYABLE TO: Temple Beth Am The Reform Jewish Congregation of Merrick and Bellmore, Inc. (a qualified charity).

By making the charitable distribution directly, your current RMD becomes a nontaxable event. Yes, you could also take the RMD normally (payable to yourself) and pick it up as income and then contribute and list it as an itemized deduction, but with that (indirect) method, depending on your income level you may not get a full deduction as there are limitations. Also, if you take the standard deduction rather than itemizing, there is no benefit derived from a charitable deduction if it is done way (indirectly).

Another advantage of the direct contribution method is that because this contribution amount will not be counted as part of your income, the additional 3.8% Net Investment Income Tax on high incomers as mandated by The Affordable Care Act would be reduced or possibly be avoided.

This is an excellent way to reduce your taxable income now, your taxable estate in the future, and do a wonderful mitzvah at the same time.

Second, in addition to the current benefit of contributing RMDs, you can plan by setting up endowments naming the Temple, and by direct bequests to the Temple in your will.

Third, yet another way to help Temple Beth Am is to make a charitable contribution of stock. If you have stock in your investment portfolio that has greatly appreciated in value over time, you can donate it and get a deduction on your tax return for the full appreciated value! If you were to sell the same stock instead, you would have to pay tax on the capital gain plus that gain would also go into the calculation of the additional 3.8% Net Investment Income Tax on high incomers as mandated by The Affordable Care Act.

We appreciate your consideration and encourage you to take advantage by arranging to make your donation now while there is still time left to have a positive impact your 2017 taxes!

For additional information, please contact Michael Young at 516-695-5457 or Angelo Albano at 516-379-0768.

Thank you.

Jeff Newman,
Member, Board of Trustees

The above is not meant to be professional tax or legal advice and is based on current tax law in effect for 2017. It is highly recommended that you consult your tax adviser, estate planner and investment advisor to determine if this is the right move for you and those you know.