IRA Donations

IRA Charitable Rollover Restored: Now is Your Opportunity

Older Americans may once again contribute directly to WildEarth Guardians from their individual retirement accounts, thanks to a provision in the Emergency Economic Stabilization Act of 2008 recently signed into law.

The IRA Charitable Rollover tax incentive, available through December 2009, allows individuals aged 70½ and older to donate up to $100,000 from their Individual Retirement Accounts (IRAs) and Roth IRAs to public charities such as WildEarth Guardians without having to count the distributions as taxable income.

How does the IRA Rollover Work?

The IRA Charitable Rollover lets taxpayers make donations directly to charitable organizations from their IRAs without paying taxes on them. Ordinarily, taxpayers age 70½ and older must make annual distributions from their IRAs and taxpayers pay taxes on this money.

Key points to know about the roll over legislation:

• Give now because only contributions completed between now and December 31, 2009, are eligible.

• Donors must be 70½ years old or older when the distribution is made.

• Total IRA rollover contributions can be up to $100,000 in any one year.

• Distributions must be made directly from the IRA trustee payable to the public charity.

Please call 505-988-9126, x1150 for more information.

There are also a number of links below that you can store for reference and background.

The first is a fact sheet from Independent Sector. You can see the fact sheet for donors here.

Their fact sheet prepared from the point of view of a charitable organization is at this location.

This article may contain far more than you want to know BUT at the end of the article are several sample letters that you could use to facilitate an actual gift. This article might be useful as a resource for financial advisors. Note: you may have to register for this article. Another link to the same article can be found at the National Committee on Planned Giving IRA Resource center which is described later in this newsletter.

A second article (by Hoyt) is a detailed discussion on the topic, also something that would be useful to pass along to donor advisors or the kind of donor who thrives on the details. His article can be found on the site of the National Committee on Planned Giving: here.

More resources about this legislation can be found at the National Committee on Planned Giving IRA Rollover Resource Center: here.

Additional Links for Reference:

Here is a link to the IRS text on the topic for reference or to pass along to a donor's professional advisor.

Here is a link to the IRS instructions on how to report the "Charitable IRA Exclusion."

Here is a link to the corrected version of the 2006 Instructions for Forms 1099-R and 5498 (Rev. October 2006) is available for download (PDF version). This addresses Section 1201 of the Pension Protection Act of 2006, which allowed certain account holders to direct a tax-free distribution to a qualified charity from a traditional IRA or Roth IRA.