Giving to Reed
IRA Rollover News
Congress Rescues IRA Charitable Rollover
In these challenging economic times, there is some good financial news for both you and Reed College: the recently signed Emergency Economic Stabilization Act of 2008 includes an extension of the IRA Charitable Rollover. You may want to consider this tax-advantaged method of maintaining your charitable giving.
If you gift your minimum required distributions (or more) from traditional or Roth IRAs directly to Reed, you can avoid paying income tax on up to $100,000 of the distribution. Here are the details:
Details:
- The donor must be 70½ at the time of transfer to ensure favorable tax treatment for that tax year.
- The transfer is limited to $100,000 per tax year (2008 and 2009) and per spouse, if the spouse has a separate IRA account.
- The transfer is not limited to 50% of adjusted gross income (AGI) like other cash gifts.
- The act applies only to traditional, rollover, and Roth IRAs. However, funds from other types of retirement plans may be rolled into a traditional IRA in order to make the gift.
- The transfer must pass directly from the IRA custodian to the qualifying charity.
- The transfer cannot be made to a donor-advised fund or a supporting organization.
- The transfer cannot be used to fund a charitable gift annuity or a charitable remainder trust.
Who might benefit from this limited-time giving opportunity?
- Those who will reach age 70½ by the time of the gift transfer
- Those who currently do not itemize deductions
- Those whose charitable deductions are maxed out
- Those subject to "tax friction"
- Those subject to both income and estate tax if IRA left to heirs
- Those subject to mandatory withdrawal
To learn more, please contact Kathy Saitas in Reed's office of planned giving at 503/777-7573 or plannedgiving@reed.edu. We would be happy to assist you with the rollover or offer other creative ways to craft a gift that is both good for you, and good for Reed.