Tax-free IRA Transfers
Pension Protection Act of 2006 - Charitable IRA Rollover Provision
On August 17, 2006, President Bush singed into law new tax incentives for charitable gifts. The IRA Charitable Rollover provision allows individuals to make distributions from their IRA accounts directly to Asbury College without recognizing the distribution as income. Key points of the provision are:
- You must be age 70 ½ or older on the date of transfer
- Transfers must be made directly by the IRA administration to Asbury College - distributions cannot be made to donor advised funds
- You may give up to $100,000 per year during both the 2006 and 2007 tax years
- Transfers may be made between now and December 31, 2007
Please note that since no taxes are paid on the charitable IRA transfers, the Act does not allow an income tax deduction for these types of gifts.
How the New Law Works
Mary, age 80, has $450,000 in an IRA. If Mary transfers $75,000 from the IRA to Asbury College, she will avoid paying income tax on that amount. She cannot, however, claim a charitable deduction.
Is she desired, Mary could give more than $100,000. The legislation allows a maximum $100,000 gift in both the 2006 and 2007 tax years. So Mary could give $100,000 each year. If her spouse has an IRA and is 70 ½ years old or older, he can also give up to $100,000 each year.
How to Make a Gift
Contact your IRA custodian to transfer you desired gift amount to Asbury College and then contact the Asbury College Office of Gift Planning at 800-888-1818 ext. 2104 to inform us of your transfer.
For More Information
Please feel free to contact the Office of Gift Planning at 800-888-1818 ext. 2104 with any questions.
The information on this site is not intended as legal, tax or investment advice. For advice regarding all matters associated with charitable giving, please consult an attorney, tax professional and/or investment professional.