Wednesday, December 17, 2014

Act Now to Take Advantage of IRA Charitable Rollover for 2014

The Senate just passed HR 5771 and President Obama signed the Tax Increase Prevention Act of 2014, which includes an extension through December 31, 2014 of the IRA Charitable Rollover.  

Tia and Ken Scigulinsky have been long-time supporters of Rhode Island PBS and today we’d like take this opportunity to describe the vehicle by which they have made their charitable contributions to Rhode Island PBS, in hopes their story will benefit you as well.


Since being introduced in 2006, the charitable IRA rollover has become a favorite of charitably-minded taxpayers. Many have enthusiastically embraced the opportunity to transfer up to $100,000 each year to charity without being treated as a taxable distribution. It's a simple but powerful planning strategy for taxpayers 70 ½ or older who are required to take a minimum distribution from their IRA, but may not need the income to live.

Such is the case for Ken and Tia Scigulinsky of Portsmouth, RI.

Ken and Tia Scigulinsky
Devoted to their family, their community, and their country, Ken and Tia generously give of their time as well as their money. They volunteer with several education-related organizations and committees in the greater Newport area where they live.

Ken and Tia have supported Rhode Island PBS for more than a decade. Tia served consecutive terms as a member of the Rhode Island Public Telecommunications Authority, the station's former governing body, and currently serves as board secretary on the Rhode Island PBS Foundation Board of Directors.

The Scigulinskys recently sat with Rhode Island PBS Director of Development and External Affairs Molly Garrison to discuss why the charitable IRA rollover made sense for them.

"We've worked hard all our lives and now enjoy a comfortable financial position in retirement that permits us to support our favorite organizations," Tia said. "We appreciate Rhode Island PBS on several levels - the format that lets us enjoy our shows without commercial interruption; the abundance of music, cultural, and performing arts from the best stages in the world; the subtle but very real learning that permeates the entire schedule--"

"Turn on the channel and learn something new every time," Ken interjected.

"Plus, the station's commitment to producing and presenting local stories," Tia concluded. "All of those reasons define Rhode Island PBS's role in the community and why it's important to us."

"You can call it the lure of 'convenience, culture, and community,'" said Ken.  

"It sounds like a scripted commercial, but it's true," Tia laughed. "Rhode Island PBS really is the local trusted source of quality programming that actually makes a difference in the lives of viewers. I know it makes a difference in our lives, and we want to preserve that experience for future generations by giving what we can now," she said.

"As fond as we are of Rhode Island PBS, our motives are not exclusively philanthropic," Ken grinned broadly. "There's also a practical advantage to giving this way. We trusted our financial advisor's recommendation that it would be better to make our contribution directly from an IRA so that the money is not considered income to us, as opposed to receiving the IRA money as income, then making a tax-deductible donation." 

Plus, as Ken noted, donating these assets, rather than taking minimum required distributions, may also enable older donors to avoid certain penalties that come with a higher adjusted gross income, such as higher Medicare premiums.

"And it was easy to do, too," Tia explained. "A Web search summarized the process with clear, simple directions and included a sample letter to send to the IRA manager to request the transfer. A call to our financial advisor confirmed the move."

We at Rhode Island PBS appreciate the inspiring generosity of spirit and deed Tia and Ken demonstrate every day. We hope you find their story inspiring as well, and useful in your year-end financial planning.

These are the summarized requirements and restrictions for making a charitable IRA rollover gift:
  • The donor must be 70 1/2 or older.
  • The gift must be made directly from the IRA to an eligible charitable organization by December 31, 2014.
  • Gifts to all charities combined cannot exceed a total of $100,000 per taxpayer for the year.
  • The gifts must be outright, and no material benefits can be received in return for the gifts. 
  • The gift is not included in taxable income, and no charitable deduction is allowed.
  • The gift can only be made from an IRA. Gifts from a 401(k), 403(b), and 457 plans must be rolled into an IRA first, then the gift can be made from the IRA.
To complete an IRA charitable rollover, the first step is to contact your IRA provider to learn the provider's specific procedures. 

The charitable IRA Rollover expires December 31st. However, there are other creative ways to support Rhode Island PBS that never expire - where you and that station you love benefit at the same time. Such giving techniques are called "planned gifts" because, with thoughtful planning, you create win-win solutions for you and Rhode Island PBS. 

For example:
  • You can make a gift that costs nothing during your lifetime, by including Rhode Island PBS in your will.
  • You can give stock to Rhode Island PBS and avoid paying capital gains tax.
To learn more, call Molly Garrison, Director of Development and External Affairs 401-222-3636 ext. 336.

CLICK HERE for the sample letter

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