By Sister Laura Goedken
One of our donors had $40,000 in a 403B. He asked how he could donate this to Sacred Heart Cathedral’s building project in Davenport. I recommended that he ask his broker to roll this over into an IRA. When the federal government approves donating directly to a qualified charity from your IRA, the donor will be ready.
On Dec. 18, when President Obama signed the charitable IRA into law, I contacted the donor who called his broker who did the necessary paperwork to donate the IRA directly to Sacred Heart Cathedral.
I notified the parish about this gift and shared information needed by this donor for his taxes following the donation. This tax letter needs to be saved for several years in case the donor is audited by the IRS.
The donor wanted to assist the cathedral with its building project and he knew he did not need his 403B for retirement living. He also knew if he cashed in his 403B he would need to pay taxes on it. This would put him in another tax bracket which could also require him to pay taxes on his Social Security payments.
This is a win/win for the donor and for Sacred Heart Cathedral parish.
This new law permits anyone who is 70½ or older with an IRA to donate up to $100,000 annually to a qualified charity without paying taxes on it. Qualified charities include the Catholic Foundation for the Diocese, the Diocese of Davenport, your parish or your Catholic school.
This new law is a permanent tax extender. This means you can donate from your IRA every year without paying taxes on this money. The check needs to come from the company holding of your IRA directly to the charity. For more information contact Sister Laura Goedken, OP, at Goedken@davenportdiocese.org or (563) 888-4252.