Dear Southwest Christian Church Family:

Earlier this year we purchased the property next to our campus. Several groups are reviewing the plans for the use of that property. They are also reviewing long-term space needs for our overall church as we grow. When those plans are finalized and approved by the congregation, we will have a building fund campaign.

In the meantime, we do have the debt from the land purchase. The following information may be helpful in your year-end giving plans.

Qualified charitable distributions allow you the convenience to reduce taxable income, achieve charitable giving goals and if necessary, satisfy your required minimum distribution – all in one transaction.
Individuals over age 701⁄2 can donate up to $100,000 from an IRA directly to a qualified charity without triggering any federal income taxes. Under the qualified charitable distributions provision, you request a distribution from your IRA and provide your IRA fund manager with the name and address of the qualifying charity. The distribution will be sent directly to the charity of your choice. Married spouses who are both age 701⁄2 or older can each contribute up to $100,000 annually. However, the contributions must come from their own IRA.

Benefits of qualified charitable distributions – there are several potential tax benefits to you for making a chartable contribution directly from you IRA:

  • Income tax on the distribution is avoided-even if you do not itemize deductions are even if your gifts exceed the percentage-of-income limits for charitable deductions.
  • The qualified charitable distribution comes out of the pretax portion of your aggregated IRAs. This is an exception to the usual rule regrading recovery of IRA basis.
  • The distribution does not increase your adjusted gross income for purposes of reducing itemized deductions, nor does it limit the amount of deductible medical expenses or miscellaneous itemized deductions or increase the taxation of your Social Security benefits.
  • If the state you live in determines taxable income based on federal adjusted gross income, there is no state income tax on the distribution-even if the state does not allow the charitable deduction.

Note: Because the transfer is tax-free, you may not take the charitable deduction on your tax return.

Qualified charitable distribution requirements

Certain requirements need to be met in order for a distribution to be considered a qualified charitable distribution. These include:

  • The distribution must come from a traditional or Roth IRA. The provision does not apply to active SEPs and SIMPLE IRAs or qualified plans.
  • You must be age 701⁄2 or older by the date of the distribution.
  • In the case of an IRA maintained for the benefit of a beneficiary after the death of an IRA owner, the beneficiary must be age 701⁄2 or older by the date of the distribution.
  • The receiving charity can be any qualified nonprofit other than a Donor-Advised-Fund, a supporting organization, or certain private foundations.
  • The contribution must be one that would normally be 100% deductible as a charitable contribution.
  • If using check-writing via a qualified account, the charity needs to cash the check prior to December 31st. Receipt is required.

Put qualified charitable distributions to work for you and Southwest Christian Church.

Southwest Christian Church does not provide tax or legal advice. All decisions related to the tax or legal implications of your investments should be made in connection with your independent tax or legal advisor.

Sincerely,

Robert C. McMahan
For the Finance Ministry