Last Chance for IRA Rollover > Chautauqua Region Community Foundation

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Last Chance for IRA Rollover
Monday, October 29, 2007

By Jared Lindell

Over the past year and a half, the Community Foundation has talked and written a great deal about the charitable IRA rollover. This new giving option was enacted in August 2006, when Congress passed a law that allows individuals to give individual retirement account (IRA) assets to charity until December 31, 2007, free from federal tax. As individuals prepare their year-end distributions, the IRA rollover is one more way to leverage your assets for charitable purposes.

The key benefit of making an IRA rollover gift is that the donor does not have to pay federal income tax on the distribution. Although there is no charitable deduction for the gift, the transfer qualifies for the IRA owner’s required minimum distribution, which could lead to a substantial reduction in taxable income. More importantly, making this type of gift allows a donor to help his/her favorite cause by passing these assets on to charity. At the Community Foundation, this could be done by starting a new fund or simply rolling the IRA assets over into an existing fund.

Many individuals nationwide are taking advantage of this opportunity. By working closely with a financial planner and the Community Foundation, this gift can be easy for any donor. The following are a few simple items to remember when choosing to make an IRA gift:

1) Individuals can give up to $100,000 from individual IRAs. Married couples can give up to $100,000 each.

2) Gifts may be made from an IRA account only. Other plans may be rolled over into an IRA for gift purposes.

3) IRA gifts must be made to public charities and not to private foundations, donor advised funds, or supporting organizations.

4) IRA gifts cannot be used to fund a life income plan, such as a gift annuity or charitable remainder trust.

5) The donor must be 70½ on the date of the gift to qualify and have it count toward the donor’s required minimum distribution.

Should you have any questions regarding the charitable IRA rollover, you can get some answers by simply visiting the Community Foundation’s website at www.crcfonline.org. When visiting the site, click on the “Donor Services” link on the left-hand menu. There you will find more information on the charitable IRA rollover, as well as a frequently-asked questions section about the IRA rollover. Additionally, you should always consult your financial planner before making any decisions on this type of gift to make sure it is the right fit for you.

If you have invested wisely and prudently over the years, then your IRA has likely performed well and grown. If you desire to avoid increasing your taxable income by taking your minimum distribution amount or are simply looking for an easy way to make a gift to charity, then this fall is the perfect time to take advantage of the charitable IRA rollover. Remember, this may be the last chance to make this type of gift, as the rollover option is set to expire on December 31, 2007. Please contact the Community Foundation staff at 661-3390, if you would like more information on this gift opportunity of a lifetime.

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