IRA Charitable Rollovers Extended through 2009

A creative way to give to your favorite charity

In Division C -- the "Tax Extenders and Alternative Minimum Tax Relief Act of 2008" of H.R. 1424, Congress extended an excellent charitable planning opportunity for both 2008 and 2009. This act permits an IRA owner age 70½ or older to make a direct transfer to charity. The transfer may be up to $100,000 in one year and this IRA rollover will exist for year 2008 and year 2009. Sec. 408(d)(8)(A).

You can make a gift from you IRA to a public charity, but not to a donor advised fund (such as your CFT Giving Fund) or a private foundation.  However, CFT can help you establish a 'Designated Fund' that allows you to (a) contribute part of your IRA, (b) designate which charity you wish to receive the funds, and (c) advise CFT about the timing of grant checks to the charity – as well as the investment of the funds. CFT will take care of the rest.

Who Qualifies?

Until the end of 2009, lifetime distributions from Traditional IRAs by plan owners who have attained at least age 70 ½ (on the date of distribution) to charity may distribute up to $100,000 per year from their IRA directly to a charitable organization and exclude the contributed amount from their gross income for tax purposes. This amount can be counted towards the annual mandatory IRA distribution.

Who can receive IRA distributions?

IRA distributions can be made to field of interest funds, designated funds, scholarships, and restricted/general endowments in which donors or their designees have no advisory rights. IRA distributions cannot go to donor advised funds, a supporting organizations, or a private foundations. The distribution cannot be made in connection with a Charitable Gift Annuity or Charitable Trust, and the donor may receive no quid pro quo benefits in exchange for their contribution.

So, now that I qualify and my IRA qualifies, how do I do this?

1. Contact your IRA custodian. The custodian will make the check payable directly to The Christian Foundation of the Triangle.
2. Establish your designated fund(s) with CFT indicating the recipient charity(s).
3. Obtain a written receipt from CFT.
4. Work with your accountant to determine the exclusion on your tax return and any net taxable income amount which will need to be included on your 1040.
5. CFTwill distribute the funds in accordance with your desires.

Contact Alanna Linden, CFT Executive Director, at 919-743-2024 or alinden@cftriangle.org for more information.