Thank you for your interest in making a tax-free lifetime IRA gift to Barnard. The special provision permitting such gifts expired on December 31, 2007. As new information becomes available, we will share it with you.
IRA Charitable Rollover: A Window of Opportunity
The Emergency Economic Stabilization Act of 2008 extends this exciting opportunity for charitable giving, allowing individuals to make charitable gifts directly from their IRA assets without tax complications.
You (or your spouse) are eligible to take advantage of this long-awaited, limited-time opportunity if:
- You are age 70 1/2 or older;
- You make an outright gift to a qualified charitable organization, like Barnard; and
- You transfer funds from your IRA by December 31, 2009.
You may give up to $100,000 per year under this rule. Any gift you make in this way will count toward your minimum required distribution. Please note that you must direct the administrator of your IRA to transfer the funds directly to a qualified charity. Since IRA accounts generally contain assets that have not been subject to income tax, there is no charitable deduction associated with the gift. Outright distributions to charity from other types of retirement plans, like 401(k)s and 403(b)s, do not qualify under the rule.
Prior to the enactment of the Pension Protection Act of 2006, which originally contained the IRA charitable rollover provision, you would have had to report a withdrawal from your IRA as income and then declare an income-tax deduction. For some people, such a gift would actually cause an increase in taxes. Under the Emergency Economic Stabilization Act of 2008, which extended the IRA charitable rollover provision, this is no longer a concern for those who are eligible to take advantage of the rule. Now (and until December 31, 2009), if you direct your IRA administrator to transfer assets directly to a qualified charity, you will not recognize income and will not have to worry about increasing your income taxes.
If you fit in any of the following categories, this new rule might be especially beneficial for you:
- You have an over-funded IRA that you and your spouse will not need in your lifetimes and want to avoid the heavy tax burden that results when these assets pass to other family members.
- You have sufficient income for your needs from other sources, but must still take the required minimum distribution from your IRA.
- You have already reached your giving limits based on your adjusted gross income (AGI).
- Your income level causes the phase out of your exemptions.
- You do not itemize your tax deductions.
- Additional income would cause more of your Social Security income to be taxed.
Even if you can’t take advantage of this opportunity, you may know others who can. Please share this information with them.
If you have been considering making a gift to Barnard from your retirement assets, the extension of the IRA charitable rollover provision creates a terrific opportunity, but it won’t last very long.
**Special note: This law is new for everyone — including IRA administrators. Each financial institution that administers IRA accounts may have its own procedures. It is important to remember that any gift you make from your IRA must go directly to Barnard (or any other qualified charity), and not to you. We have already worked with several IRA administrators and can help you with the process.**
If you have any questions about this special way to support Barnard, please call Audra Lewton at (212) 854-0787, or send an e-mail to plannedgiving@barnard.edu.
It is always a good idea to talk to your advisors before making important financial decisions. Your tax and financial advisors can provide advice on the applicability of the new law to your particular circumstances.
