Tax-free gift of IRA assets allowed through December 2009
New legislation is extending the Charitable IRA Rollover provision for 2 years. Qualified American seniors can make the gift of a lifetime by transferring a portion of their individual retirement accounts (IRAs) to charity, free from federal tax.
Through December 2009, qualified IRA holders can transfer up to $100,000 per year directly from their IRA to Planned Parenthood of Maryland without incurring income taxes today or estate and income taxes in the future.
Here’s how the IRA rollover works:
- You may distribute from your IRA up to $100,000 per year tax-free through December 31, 2009, to a qualified public charity.
- You must be 70 ½ years or older at the time of the gift.
- Make the transfer directly through your IRA trustee.
- While there is no charitable deduction for an IRA charitable rollover, you may exclude the gifted amount from taxable gross income (provided the distribution would be otherwise taxable), and the IRA gift will be counted toward the minimum distribution requirements for IRAs.
- A direct distribution to charity is not a “withdrawal” that would customarily be subject to income taxation.
You may be interested in this charitable opportunity if you:
- Have excess retirement savings.
- Are subject to a 50 percent of income charitable deduction limitation.
- Take the standard deduction on your tax return.
- Accept minimum distributions from an IRA and have alternative sources of income.
- Have an adjusted gross income above $159,950 ($79,975 for married, filed separately), making you subject to a phase-out of itemized deductions.
- Are planning to leave a charitable legacy through an estate plan.
- Have designated a favorite charity as beneficiary of retirement assets.
- Care about your community and want to know that your gifts will make a difference right now.
Important limitation
The law does not allow contributions to donor-advised funds, supporting organizations, private non-operating foundations, life income plans and charitable lead trusts.
Existing rules for IRA gifts via bequest
A gift to charity of an IRA or other qualified retirement plan after your lifetime eliminates the heavy dual burden on heirs of estate tax and income tax. Families inheriting qualified plans may receive as little as fifteen cents on the dollar. In contrast, if left to charity, neither tax is imposed.
Please note: This information is not intended to provided legal advice, and merely conveys factual information about a law. It is not intended to be applied to an individual's specific circumstances. This information should not be relied upon or used by any taxpayer for the purpose of avoiding penalties that may be imposed be the Internal Revenue Service.
Questions?
Email development@ppmaryland.org or call us at: 410-576-2150.
Leave a Legacy in Your Will
Your will affirms, honors, and protects what matters most in your life – your loved ones, your principles, your values.
Through estate planning, you can help ensure that reproductive health care, sex education, and women’s rights will continue for generations to come. Including Planned Parenthood of Maryland in your will is one of the most meaningful and generous gifts you can make.
Click here to learn about our exciting 5 year campaign and read an inspiring story.
Click here to download a PDF Estate Planning Brochure.
Charitable Gift Annuities
Are you interested in making a meaningful contribution to Planned Parenthood of Maryland today and supporting future generations tomorrow? Do you want to receive fixed income for life, an immediate charitable tax deduction, and reduced capital gain tax? Then a Charitable Gift Annuity may meet your objectives.
Click here to download a PDF Charitable Gift Annuities Brochure.
As of November 2009, the new minimum age for a Charitable Gift Annuity is 70, the new minimum gift is $10,000 for an individual and $20,000 for a couple and the new maximum deferral is 5 years.
