Impact Giving From Your IRA

For many, retirement accounts represent the culmination of one’s life work that was built over decades. At Notre Dame, IRA Charitable Rollover gifts (also known as qualified charitable distributions or “QCDs”) are an excellent opportunity to direct how those resources will be used toward an area of passion while also reducing your tax burden. Typically, taking a direct distribution from your IRA would require you to pay taxes on that amount [AO1] at the ordinary income tax rate. However, using your IRA to make a charitable gift directly to Notre Dame may provide a tax-savvy strategy, allowing you to fulfill your philanthropic goals and mitigate the tax impact of retirement distributions.

For individuals who invested in pre-tax retirement accounts, the IRS requires that taxable distributions be taken annually upon the owner reaching age 73. These are called required minimum distributions (RMD) and serve as a way to ensure assets are not indefinitely held in a retirement account. The RMD starts out as a smaller percentage of the pre-tax assets; however, the annual percentage is based on life expectancy, increasing the RMD over time. Based on the total value of assets held in pre-tax retirement accounts, these RMDs can create a higher tax burden when combined with other streams of income in retirement, especially due to distributions being treated as ordinary income in the year in which they are taken.

In cases where IRA owners do not need the additional influx of cash from the distributions and want to support a charitable interest, the IRA Charitable Rollover can be a highly effective strategy. IRA Charitable Rollovers are a tax code carve-out that enables an IRA owner age 70 ½ or older to make an annual tax-free gift of up to $100,000 directly from the individual’s IRA to a non-profit organization, such as Notre Dame.

Why Utilize an IRA Charitable Rollover

• Upon turning 73, this approach can be an attractive option if you do not want or need the extra taxable income from your RMD.

• Your gift is not subject to income tax. The transfer generates neither taxable income nor a tax deduction, so you benefit even if you do not itemize your deductions.

• Since your gift does not count as income, it can reduce your annual income level.

• Your gift will be put to use at Notre Dame today, allowing you to see the impact of your generosity.

• Up to $50,000 can be elected from a single QCD to create an income-generating gift for an individual, such as a Charitable Remainder Trust. Read more about this unique strategy here.