IRA Charitable Rollover
Recently, Congress passed, and the President signed, legislation which includes a provision for qualified charitable contributions from Individual Retirement Accounts (IRA's), sometimes referred to as "Charitable IRA Rollovers." The Pension Protection Act of 2006 allows individuals to rollover up to $100,000 from an IRA or Roth IRA directly to a qualifying charity without recognizing the assets transferred as a taxable distribution.
Please note that this Act only applies to IRA or Roth IRA accounts not – 401K or 403B or other retirement accounts. If you have one of those accounts, you would first need to roll it over into an IRA and then make the distribution directly to Boys & Girls Clubs of America.
Effective Date: The Charitable IRA Rollover portion of this legislation
will expire on December 31, 2007.
Know the Rules:
- Donors must
be 70 ½ (at
date of contribution) or older between now and the end of 2007.
- The
money must be distributed directly to Boys & Girls Clubs
of America.
- The maximum
contribution allowed per individual is $100,000 per year.
- The rollover
is not eligible for a charitable tax deduction.
- The gift
cannot be used to fund a deferred gift plan (such as a charitable remainder
trust or charitable gift annuity).
What are
the benefits to you, the donor?
- The ability
to make a substantial gift to Boys & Girls Clubs
of America.
- If the individual
is required to receive distribution from his/her IRA account, this distribution
will be treated as a minimum required distribution.
Does the
individual receive a charitable deduction when they rollover assets
to Boys & Girls Clubs of America?
No, the benefit is that you do not recognize the amount contributed
to Boys & Girls Clubs of America in your gross income.
How does
an individual make a qualified charitable distribution? You contact your
IRA trustee to make the contribution directly to Boys & Girls Clubs of America.
If you are
interested in discussing your options under this unique provision, please
feel free to email us at Heritage@bgca.org.
As always,
we recommend you seek the advice of your tax and/or legal counsel before
deciding on a course of action.
Many thanks
for your interest and support.
