The Charitable IRA Rollover: Recently Re-enacted by Congress!
On Oct. 3, 2008, Congress passed and the president signed the Emergency Economic Stabilization Act of 2008 (H.R. 1424), legislation that includes a two-year extension of the IRA charitable rollover. The provision, originally enacted as part of the Pension Protection Act of 2006 (PPA), permits IRA owners starting at age 70½ to make tax-free charitable gifts totaling up to $100,000 per year from their IRAs directly to eligible charities
Click here for a sample letter to direct your charitable IRA rollover to the Clay Center.
The charitable IRA rollover provision does not apply to other types of retirement plans, trusts, annuities or pooled income funds. A charitable IRA rollover should only be considered by individuals who are sure that they will not need these assets at a later date. A donor of any age can still make a tax-wise gift of an IRA or other retirement account by naming the Clay Center as a beneficiary at their death.
There is no income tax deduction for the charitable IRA rollover, unless the rollover is made with documented taxable contributions, nor is any income realized by the donor. This scenario is more beneficial for most donors as compared to a taxable IRA distribution followed by a charitable deduction. The charitable IRA rollover negates the I.R.C. section 68 phase out of deductions and eliminates issues related to carryover of existing charitable deductions resulting in no self employment or Social Security taxes, and in most cases no state income tax applicable to the rollover.
The charitable IRA rollover should be directly transferred from the IRA plan administrator, custodian or trustee, to the charity. The donor should not accept any distribution of funds intended for a charitable IRA rollover. Note that custodians are also learning how to handle these gifts and any rollover should be directed well ahead of time in order to allow for unexpected delays.
To advise the Clay Center about a charitable IRA rollover and the donor’s wishes for use of the gift, please contact:
Ron Huiatt
Chief Development Officer
Clay Center for the Arts and Sciences of West Virginia
One Clay Square
Charleston, WV 25301
Phone: (304) 561-3588
Email: rhuiatt@theclaycenter.org