HOW WE USE YOUR GIFT
OPPORTUNITY RETURNS FOR DIRECT IRA TRANSFERS TO MARQUETTE
The newly extended IRA charitable rollover allows individuals 70 ½ yrs. or older to EXCLUDE FROM GROSS INCOME any direct charitable transfers they make from their Individual Retirement Accounts (IRAs), up to $100,000 per year, for tax year 2009.
Previously, if an individual withdrew money from his IRA and then contributed it to a charity, the individual was required to include the withdrawn amount in his taxable income. The individual could then claim a charitable tax deduction to offset (completely, or at least partially) the income reported. For donors who were unable to use some or all of their charitable deduction to offset the income reported, this law is a tremendous opportunity to increase their charitable giving.
WHAT OUR DONORS NEED TO KNOW
- The law is in effect NOW; but is only available in 2009.
- The individual donor must be age 70 ½ by the contribution date
- The transfer must go directly from the IRA to a public charity, such as Marquette University. Withdrawals directed to donor advised funds or for charitable remainder trusts or charitable gift annuities are NOT excludable.
- The exclusion is limited to a total of $100,000 per taxpayer, per year (married couples can donate up to $200,000, assuming each spouse withdraws from his/her own IRA.)
- The exclusion ONLY applies to withdrawals from traditional IRAs and Roth IRAs. Retirement plans such as 401(K), 403(b) annuities, defined benefit and contribution plans, Keogh and employer sponsored SEP and SIMPLE plans are NOT excludable.
- Using a charitable IRA rollover does NOT entitle you to claim a deduction in the amount of the IRA distribution to Marquette. It does allow you to exclude the IRA distribution from your reportable income, up to $100,000 per person.
- A donor cannot receive benefits in exchange for a gift from an IRA.
If an IRA charitable rollover donor receives any benefits that would typically reduce his or her charitable deduction (such as athletic points), the donor can no longer exclude ANY PART of the IRA distribution from income. Therefore, in order to protect the donor’s right to exclude the entire amount of the gift from income, no benefit of any value shall be provided to the donor by Marquette University.
WHAT DONORS MIGHT BEST UTILIZE THIS OPPORTUNITY
- Anyone who must take a minimum IRA withdrawal, wants to avoid paying income taxes on the withdrawal and has sufficient alternative sources of income that they can direct their IRA withdrawal to charity
- Anyone who typically exceeds the maximum amount allowed for charitable deductions – which is 50% of their adjusted gross income (AGI). This donor can now withdraw and gift up to $100,000 from their IRA account(s).
- Anyone who has significant funds in IRAs and wants the simplicity of calling up their retirement account manager and instructing them to directly forward money to their favorite charity.
FOR MORE INFORMATION, CONTACT CATHY STEINHAFEL AT CATHERINE.STEINHAFEL@MARQUETTE.EDU OR AT (414) 288-6501.
Make a Gift Online
