IRA Rollover Toolkit

Opportunity to Make Tax-Free IRA Gifts to Charity Extended into 2010 and 2011

For more information, please contact Hugh Montgomery
Director of Gift Planning at 603.504.3241
hmontgomery@thesca.org
IRA Sample Rollover Letters

It is once again possible for individuals 70½ or older to make tax-free gifts to SCA and other public charities from their IRAs. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, just signed by the president, extends this popular opportunity to make transfers of up to $100,000 per year into 2010 and 2011.

A great advantage of this provision is that amounts distributed to charity count toward your required minimum distribution for the year. So, if you have not yet taken your 2010 required minimum distribution, you can transfer part or all of your distribution directly from your IRA to SCA by January 31, 2011 [an extended deadline] and the amount transferred will not be recognized as taxable income on your tax return.

If you have already taken your 2010 required minimum distribution, you will recognize that income on your tax return. But you can still transfer up to $100,000 tax-free to SCA from your IRA by January 31, 2011 and elect to have it apply toward your 2010 limit. You can make a transfer at any time in 2011 that will count toward your 2011 required minimum distribution and limit of $100,000.

Here's a quick recap of the requirements and tax treatment of qualified charitable distributions:

• You must be 70½ or older at the time your charitable transfer is made.
• Transfers of up to $100,000 per year can be made to public charities (other than donor advised funds and supporting organizations).
• Transfers must be made directly by your IRA administrator or trustee to the charity.
• There can be no quid pro quo. (You cannot receive any benefits in return from the charity.)
• The amount transferred to charity counts toward your required minimum distribution for the year, assuming that you have not already taken your required minimum distribution
• The amount you transfer to charity is not included in your federal adjusted gross income. You do not receive an income tax deduction, but not paying tax on otherwise taxable income is the equivalent of a charitable deduction. So you will benefit even if you don't itemize deductions.

The sample letters attached here as a PDF provide the information you need to authorize your administrator or trustee to make a charitable transfer and, simultaneously, to let SCA know of your intentions. This will enable us to thank you appropriately and, if necessary, stay in touch with you and your advisors to ensure that transfers are made in a timely fashion.

An IRA Rollover gift is a wonderful way to ensure that your hard-earned money will be used to keep young people at work protecting our treasured lands.

Of course I would also be glad to speak with you if you have questions. My direct line is 603.504.3241. Here’s hoping that you are looking forward to a delightful holiday season and a wonderful new year ahead.

Hugh Montgomery
Director of Gift Planning
hmontgomery@thesca.org

IRA Sample Rollover Letters

P.S. One donor who intends to take advantage of the IRA Rollover just sent me a message: "I appreciate your close watch on philanthropic legislation.  Keep up the good work - in term of programs, and in terms of helping your donors maximize their contributions in an efficient manner."