October 2007

Giving Opportunity for IRA Owners Faces Dec. 31 Deadline

Contact University of Minnesota Foundation Planned Giving office at 800-775-2187 or 612-624-3333 for more information

Anyone age 70½ or older still can make a gift from their Individual Retirement Account (IRA) without incurring income tax. In 2006, President Bush signed into law the Pension Protection Act of 2006. This act has a provision that allows individuals who are receiving minimum required distributions from their IRAs to contribute part of their IRA to charity without paying income tax on the distribution. But this opportunity is only available until December 31, 2007.

Here are the requirements:

• Must be at least age 70 ½ at the time of the gift.
• Must have a traditional or Roth IRA, or owners of other types of qualified plans may roll assets into an IRA to allow them to make gifts.
• Each person can give up to $100,000 per year ($200,000 for a couple) for 2006 and 2007.
• Must request a direct transfer of funds from the IRA to a qualified public charity, not to a private foundation or donor advised fund.
• Cannot use the gift to fund a gift annuity, or charitable remainder trust.
• Can satisfy the minimum required distribution for that tax year without adding to tax liability.
• IRA withdrawal is not added to gross taxable income and is not taxed (there is no charitable income tax deduction).

To help simplify the process for donors, the UofM Foundation has prepared samples letters for donors to send to their IRA administrator to direct the transfer to the Foundation, and a letter to the Foundation to notify them of the gift transfer and designation.

If you are interested, please contact your IRA administrator or call the University of Minnesota Foundation Planned Giving office at 800-775-2187 or 612-624-3333 for more information.

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