Charitable IRA Rollover Gifts
IRA Gifts by Donors over Age 70½ Authorized by Congress through 2009
12/31/09 Legislative Update: As part of the Tax Extenders Act of 2009 (H.R. 4213), the House of Representatives, on December 9, 2009, approved a one-year extension of the IRA Charitable Rollover. The bill is now before the Senate. Please check back for further updates.
As part of the Emergency Economic Stabilization Act of 2008, Federal tax legislation currently permits donors over age 70½ to make charitable distributions from their IRAs. This is the same law in effect since 2006, allowing many KTEH viewers and listeners to use unneeded distributions from their IRAs to support our programs.
Up to $100,000 can be given in this manner, through 2009. Donors save taxes on IRA distributions to qualified charities as gift amounts are not included in the donor's income. (Because of this benefit, no charitable income tax deduction is available.) Such gifts can also relieve tax penalties that affect high income taxpayers, including loss of AMT exemptions and reductions in itemized deductions and personal exemptions. In some cases IRA gifts may reduce income taxes on Social Security benefits.
How to Make a Gift From Your IRA
To make a gift from your IRA, contact your IRA trustee or custodian. State that you wish to have a distribution check issued in the name Northern California Public Broadcasting (KTEH's formal name since 2006) and mailed to our office with a note identifying you as the donor. It is important that you notify us so we can coordinate with you and your IRA administrator to ensure that your gift is completed by the end of the tax year and that you receive the necessary receipt. We can provide a form letter for you to send to your IRA custodian. Please email us or telephone (415) 553-2300 to request the form letter, or with any questions about planning gifts from your IRA.
More about making a Charitable IRA Rollover Gift...
IRA gifts may have special appeal for:
- Donors who want to reduce taxes on their estates. IRAs are subject to both income taxes and "death taxes" after the owner dies. Making qualified IRA gifts avoids these taxes.
- Supporters who can't deduct all their contributions. The most a person can deduct for charitable gifts in any year is 50% of AGI (excess deductions can be carried over for up to five years). But gifts made directly from IRAs aren't considered under this 50% limitation, which makes possible extra tax benefits for friends who wish to make large gifts this year.
IRA Rollover Gift Rule Book
- Donors must be past the age of 70½ and own an IRA—other retirement plans such as pensions, 401(k) and 403(b) plans are not eligible.
- Only the IRA trustee or custodian can transfer gift amounts to a qualified organization. If IRA owners withdraw funds and then contribute them to charity separately, withdrawn amounts will be included in the donor's gross income.
- No charitable deductions are allowed, but gift amounts will not be included in the donor's income.
- IRA gifts may not exceed $100,000 per donor and may be made only through 2009. (Pending legislation would extend this benefit.)
- The "ceilings" on contribution deductions (50% of adjusted gross income for cash, 30% of AGI for long-term capital gain property) do not apply to IRA gifts.
- Transfers can only be made to public charities such as KTEH. Please use our formal name "Northern California Public Broadcasting, Inc."
- IRA gifts cannot be made to charitable remainder trusts or other "life income gift" arrangements.
