If you or a family member (older than age 70½) are considering making a gift to the Naomi Berrie Diabetes Center this year, transferring funds from a retirement account is among the best ways (from a tax perspective at least) to support your favorite charitable institution.
This year presents a unique opportunity to support the Berrie Center through an IRA Charitable Rollover gift — a provision that is set to expire at the end of the year. With the passage of the American Taxpayer Relief Act of 2012, Congress reinstated the tax-free, IRA Charitable Rollover that allows donors who are 70½ and older to transfer up to $100,000 from their retirement account to a nonprofit institution without having to declare the donation as income. That gift can also be used as, or counted towards, your mandatory, yearly retirement distribution.
Consider the following hypothetical example: You are the proud grandparent of a young woman with type 1 diabetes. She has been cared for at the Berrie Center throughout her teenage years and is currently working and thriving in New York City. You would like to invest in her future by making a gift to the Berrie Center. You know that your granddaughter’s Diabetes Center is an international leader in both diabetes research and clinical care. Who knows, maybe in her lifetime, she will see a cure for diabetes. Certainly, her clinical care will just keep getting better.
You have a traditional IRA and your required minimum yearly distribution is approximately $50,000. This year, you decide against taking the $50,000 distribution (taxable at a marginal rate of 40 per cent) or even giving it as a gift to your granddaughter. (FYI: If she were to inherit your retirement plan assets, she may see nearly 60 per cent of its value possibly depleted by federal and state income and estate taxes.)
Instead, you instruct your IRA plan administrator to transfer or rollover the $50,000 to the Naomi Berrie Diabetes Center and the funds are not counted as taxable income. The Berrie Center, meanwhile, can begin to benefit from 100 per cent of the gift.
Says Robin Goland, MD, the J. Merrill Eastman Professor of Clinical Diabetes and Co-Director of the Berrie Center, “Charitable donations make it possible for the Berrie Center to recruit the finest physicians and scientists, advance critical diabetes research and provide the most comprehensive, compassionate care to our pediatric and adult patients with diabetes and their families. “
You may direct your IRA Charitable Rollover Gift to the Naomi Berrie Diabetes Center, 1150 St. Nicholas Ave, NY, NY 10032 (attention: Jennie Preval). Our tax ID number is 13- 5598093. For more information or if you have questions, contact the Berrie Center’s Interim Executive Director of Development, Stephanie Witte, at 212-304-6418 or firstname.lastname@example.org.
We hope you will share this information with your interested friends and family members who are older than age 70½ and that they consider a gift to the Berrie Center at this unique time. You can download a sample letter explaining the IRA Charitable Rollover Gift that you may find helpful by clicking here and going to the "Retirement Account" tab. Says Dr. Goland, “We are greatly indebted to our donors and supporters who allow us to focus on our mission: better treatments and ultimately, a cure for diabetes. Together, we can change the landscape of diabetes.”