Making a donation to the Institute in 2008 and 2009 from IRA funds that would be subject to tax if withdrawn voluntarily or under mandatory withdrawal requirements may be a wise choice.  Due to the extension of the IRA Charitable Rollover Provision which first appeared in the Pension Protection Act of 2006, Congress is allowing individuals with traditional or Roth IRAs to make tax-free gifts directly to qualified charities.

An owner of a traditional or Roth IRA, who is 70 ½ or older, may instruct the trustee of his/her IRA to distribute any amount up to $100,000 annually, directly to a public charity, without the distribution being included in his/her taxable income. A couple with separate IRAs could give up to $200,000 each year. 

Highlights of the IRA Rollover Provisions   

• Gifts must be made to a tax-exempt organization, and can’t be made to a donor advised fund or a supporting organization.

• The gift must come from an IRA. Employer-sponsored retirement plans are not included.

• Gifts must be outright.  They can’t be used to fund a charitable annuity or a charitable trust.

• The provisions apply to gifts made after December 31, 2007, and expire December 31, 2009.

Please Note: IRA charitable rollovers may be included in a donor’s income for state and local tax purposes, and, depending on state and local law, may not earn an offsetting charitable deduction. Everyone’s circumstances are different. Therefore, it is important that you consult your own tax advisor, attorney, and/or financial planner to see if this giving opportunity is right for you.