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Gardner and Associates is urging its clients to inform their donors, members and prospects of the extension of the IRA rollover. Please use this example from York College as a model. Put it on your website with your giving details and on your Facebook to broaden the awareness effort.

Attempt to bring prospects to your website for further details. Make sure that your business and development staff is aware of the opportunity.

York example:

Giving to York College

IRA Charitable Rollover extended through 2013!

The American Taxpayer Relief Act of 2012 includes a one-year extension of the IRA charitable rollover (Qualified Charitable Distribution). The provision expires December 31, 2013. Principal rules for direct transfers from a traditional or Roth IRA to a qualified public charity are:

  • The IRA owner must be 70½ or older
  • The owner may transfer no more than $100,000 each year
  • The transfer qualifies for the required minimum distribution.
  • The recipient must be a public charity with 501(c)(3) status. It may not be a donor advised fund or supporting organization.
  • Outright gifts only (no gifts for a life income arrangement).
  • Transfer must be made directly from the IRA trustee to the charitable organization.

General description:

Ordinarily, an IRA owner must report withdrawals as income and pay tax on them, 40% or more in some places once you add federal, state, and local taxes together. Qualifying charitable IRA distribution (or rollover) gifts are not reportable as income, however, so they never create tax for the donor. A donor would have to report a similar gift from any other type of retirement plan as income, and then declare an income tax deduction. Not only would the gift be more complicated to execute than a charitable IRA rollover, but a variety of factors could prevent the deduction from completely offsetting the income, resulting in more taxes owed.

Details about a rollover gift:

  • Ask your IRA administrator to write a check from your IRA account to York College in the amount you wish to give. To qualify it must be a direct rollover to the college or other charity of your choice.
  • Qualifying charitable IRA rollover gifts are not reportable as income so they create no tax for you.
  • A charitable IRA rollover can count toward your minimum distribution requirement although it is not counted as income.
  • You will not receive a charitable gift receipt for a charitable IRA rollover and may not claim the gift as a deduction on your taxes.

To discuss a charitable IRA rollover, please contact any of our advancement professionals: Brent Magner at 402-363-5636, Tim Bruner at 870-612-2644, or Nick DiToro 402-363-5660. Always seek the advice of your financial planner or accountant before making any decision on a rollover.

Background

The charitable IRA rollover came into being as part of the Pension Protection Act of 2006. The rollover provision expired on December 31, 2007. It was reinstated and extended through December 31, 2009 and then reinstated a second time through December 31, 2011. Since it was first enacted in 2006, thousands of donors have made qualified charitable distributions and taken advantage of this giving option. By early fall 2013, Congress had not yet considered an extension to the provision for 2014 and beyond.