"Charitable IRA Rollover" Option Remains Available in 2007
November 16, 2007
Between now and the end of the year, a temporary change in the law continues to provide a special planning opportunity for individuals who are age 70½ or older, receive distributions from an IRA, and intend to make charitable gifts in 2007.
If you meet these qualifications, you can make distributions directly from your IRA to one or more charities without increasing your taxable income or withholding. Additionally, funds transferred from your IRA to a charity also count towards your mandatory withdrawal for 2007, and will NOT subject Social Security income to higher tax levels.
Example: Jack has $500,000 in an IRA and will be required to withdraw approximately $25,000 this year. Jack decides to authorize the trustee of the IRA to transfer $10,000 to the charity and $15,000 to himself. He will not be subject to tax on the $10,000 distributed to charity.
Click here for additional Examples. Giving from an IRA rather than other assets may be especially appropriate if:
you are required to take distributions but do not need them for living expenses, OR
you do not itemize deductions, OR
you plan to leave money to charity from you IRA at death anyway, OR
you would not be able to deduct all of your charitable contributions because of deduction limitations, OR
you may lose some of your itemized deductions because of your income level.
Certain limitations apply to these non-taxable charitable distributions from an IRA:
You must be at least 70 ½ years of age when the gift is made.
Total gifts for 2007 cannot exceed $100,000 per IRA owner / beneficiary.
Gifts must be made directly from your IRA to a public charity, and they cannot be to a supporting organization or a donor advised fund.
The gifts must be outright. For instance, they cannot be used to establish a gift annuity or fund a charitable remainder trust.
Although congress may extend this opportunity, it is currently scheduled to expire at the end of 2007. Click here for sample letters to help you make an IRA charitable rollover gift. If you would like more information about this or other ways to make a charitable gift from an IRA, please contact Gary Kopan at:
Gift Planning Office
InterVarsity Christian Fellowship
P.O. Box 7895
Madison, WI 53707-7895
