IRA Rollovers — A Creative Philanthropic Strat​egy



In these challenging economic times, Jews at risk depend on Federation support now more than ever. Some good news has come out of the recent economic recovery legislation to assist donors looking for creative ways to respond to that need.

The Emergency Economic Stabilization Act of 2008 includes an extension of the IRA charitable rollover that was permitted in 2006 and 2007. The extension is retroactive, applying to distributions made throughout both the 2008 and 2009 tax years. The extension will allow individuals 701/2 and older to donate up to $100,000 directly from their IRAs to charities. The gift will be counted toward the donor's required minimum distribution and will be excluded from the donor's income for federal purposes and not taxed. It will not be eligible for a charitable tax deduction, but it will also not count toward the annual percentage limitation on the donor's other deductible gifts, nor will it reduce the donor's other itemized deductions. Contributions can only be made from IRAs and cannot be made to donor-advised funds, supporting organizations, split-interest trusts or in exchange for gift annuities.

To obtain this benefit, a donor must instruct the IRA administrator to transfer funds directly to the charity. If a donor withdraws the funds from the IRA first and then contributes them to charity, the tax benefit is lost.

Federation urges interested donors to act soon to take advantage of the 2008 opportunity to make their annual campaign gift or to create an endowment that will make a gift to the annual campaign every year in perpetuity or to any issue or organization in the Jewish community that is important to them.

For additional information, please call Rachel Gross at 215-832-0572 or Jennifer Brier at 215-832-0528. The information contained herein should not be construed as, or relied upon, as legal or tax advice. We encourage interested donors to seek the advice of a professional advisor before making a charitable IRA rollover gift.


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