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1. |
As we have noted previously, the IRA Charitable Rollover provides an opportunity for donors over 70.5, to reach into another pocket to make charitable gifts, but does not offer such great tax benefits that you should advertise it to the exclusion of the rest of your gift planning marketing. Even so, it is something that you should make available all year long. One of the key motivators to complete a rollover is for the donor to use up their minimum required distribution. Some donors take their MRD early in the year so they don’t forget. Others take their MRD late in the year, so the funds can grow tax-deferred all year. Still others take their MRD whenever it occurs to them during the year. With that in mind, you want to include this opportunity on your website all year, and raise it in your existing publications when possible, just as you do your other gift planning opportunities. For proactive marketing, I would suggest something in January, when you can promote the idea of using the rollover for both 2010 and 2011 in a single transaction, and something in late October/early November, when the end of year MRDs are under consideration by your donors.
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2. |
No. Unfortunately, an IRA
Rollover may only be used for an outright gift to a 501(c)(3) charity. The
donor cannot receive any goods, services or personal benefits in exchange for
the IRA Rollover gift. This means no gala tickets, no purchases at silent
auctions, no golf outing sponsorships, etc. from which the donor receives a
benefit.
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3. |
As we have noted previously, the IRA Charitable Rollover provides
an opportunity for donors over 70.5, to reach into another pocket to make
charitable gifts, but does not offer such great tax benefits that you should
advertise it to the exclusion of the rest of your gift planning marketing. Even
so, it is something that you should make available all year long. One of the
key motivators to complete a rollover is for the donor to use up their minimum
required distribution. Some donors take their MRD early in the year so they
don’t forget. Others take their MRD late in the year, so the funds can grow
tax-deferred all year. Still others take their MRD whenever it occurs to them
during the year. With that in mind, you want to include this opportunity on
your website all year, and raise it in your existing publications when
possible, just as you do your other gift planning opportunities. For proactive
marketing, I would suggest something in January, when you can promote the idea
of using the rollover for both 2010 and 2011 in a single transaction, and
something in late October/early November, when the end of year MRDs are under
consideration by your donors.
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4. |
It is our understanding that it is not possible to use an IRA charitable rollover to count as an MRD when the MRD has already been taken for 2010, but each individual should check with his or her own advisors and IRA providers.
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5. |
The donor is at least age 70½ and
- Does not need the additional income necessitated by his/her minimum required distribution, OR
- His/her charitable gifts already equal 50% of his/her adjusted gross income, so he/she does not benefit from an income tax charitable deduction for additional gifts, OR
- The donor does not itemize deductions.
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6. |
Once donors reach age 70½, they are required to take minimum distributions from their retirement plans each year, according to a federal formula. IRA Rollovers count towards their minimum required distributions for the year.
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7. |
- Federal – Donors do not recognize the transfer to charity as income, provided it goes directly from the IRA provider to the charity. However, donors are not entitled to an income tax charitable deduction for their gift.
- State – Each state has different laws, so donors will need to consult with their own advisors. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal income or federal tax paid. Still other states have no income tax at all.
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8. |
No, these are not eligible.
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9. |
No, these are not eligible.
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10. |
Tax exempt organizations that are classified as 501(c)(3) charities, to which deductible contributions can be made.
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11. |
Transfers must come from donors' IRAs directly to charity. If donors have retirement assets in a 401k, 403b etc., they must first roll those funds into an IRA, and then they can direct the IRA provider to transfer the funds from the IRA directly to the charity.
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12. |
Because Congress acted so late in the year, individuals can complete an IRA Rollover through January 31, 2011 and still count it as a 2010 IRA Rollover.
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13. |
$100,000 each year. The provision expires on December 31, 2011.
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14. |
Individuals who are age 70½ or older at the time of the contribution (donors must wait until their actual 70½th birthday to make the transfer).
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15. |
The law limits these gifts to 501(c)(3) charities and excludes supporting organizations from being able to accept IRA Rollover gifts. Please check with your own legal counsel to see if your charity qualifies. Sometimes with healthcare institutions, the Foundation does not qualify, but the hospital itself does, and gifts can be directed there and then transferred to the Foundation. You should get your own legal opinion from someone familiar with your organization's structure.
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16. |
1) Yes, the IRA Charitable Rollover does expire
on December 31. In the past, Congress has been encouraged to renew this
provision and they have done so every year since it was enacted. However, with
the current debt ceiling bill forcing Congress to find an additional $1.5
trillion in cuts, it is likely that this provision will not be renewed after
this year. With that in mind, you should share this opportunity with your
donors age 70½ and older. Everything you need to market this opportunity can be
found in our kit IRA Rollover Toolkit, available for download.
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