Donate Via Required Minimum Distributions

To All Members of the Temple Beth Am Family

On behalf of the Nonevent Fundraising Subcommittee of the Revitalization Committee I would like remind inform everyone of an easy way you can help our synagogue survive and thrive as we go forward.  

Everyone who reaches age 70½ must start taking “Required Minimum Distributions” (RMD’s) from their traditional IRA accounts and rollover IRA’s. No distributions are required for Roth IRA’s.

Several years ago Congress passed and the IRS implemented a temporary measure whereby anyone over age 70½ taking RMD’s 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 70½ or if you have a relative or friend who is over 70½? It means simply that instead of taking your RMD directly and having to pay tax on it you can instruct your IRA trustee to make the distribution, or any amount up to $100,000 annually, directly to Temple Beth Am (a qualified charity).

By making the charitable distribution, your current RMD becomes a nontaxable event. Yes, you can pick it up as income and then take a contribution as an itemized deduction, but depending on your income level you may not get a full deduction as there are limitations or if you take the standard deduction, there is no benefit derived from a charitable deduction. Yet another advantage is that since this amount will not be part of income, the additional 3.8% Net Investment Income Tax on high incomers as mandated by The Affordable Care Act would be reduced.

This is an excellent way to reduce your taxable estate and do a wonderful mitzvah at the same time. In addition to the current benefit of contributing RMD’s, you can plan for the future by setting up endowments naming the temple and by direct bequests to the temple in your will.

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 sell the same stock, you would have to pay tax on the capital gain plus that gain will go into the calculation of the additional 3.8% Net Investment Income Tax on high incomers as mandated by The Affordable Care Act.

The above is not meant to be professional tax or legal advice. 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.

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

Jeff Newman,
on behalf of the Revitalization Committee