Gift from a Retirement Account

Annual withdrawals are required from traditional retirement accounts after age 72, and the withdrawals are taxed as income. However, if a person doesn’t need the income, they can avoid income tax on the withdrawal if they arrange a direct donation from their account to a qualifying charity like the MHP Foundation.

IRA owners must be 70 ½ or older to make a tax-free charitable contribution. Once a donor reaches age 70 ½, they can contribute up to $100,000 per year directly from an IRA to a charity without paying any income tax on the transaction.

Charitable contributions can only be made from IRAs, not 401(k)s or similar accounts. However, a donor can roll funds over from a 401(k) to an IRA. Talk to your broker to arrange a roll over.

The transfer must be direct from the IRA to the charity. Call your broker to arrange the transfer. The broker can contact the MHP Foundation at 317-421-0361 for account numbers, etc. if it’s a direct deposit, or they can mail a check to the MHP Foundation, 2325 Intelliplex Drive, Suite 201, Shelbyville, IN 46176. Do not withdrawal the money and then give it to the Foundation as the withdrawal will be taxed as income.