President Obama signs an extension to the IRA Charitable Rollover

December 21, 2010

On Friday, December 17, President Obama signed into law legislation that includes an extension of the IRA Charitable Rollover. This unique federal provision, effective for both 2010 and 2011, allows anyone 70.5 years or older to make an outright charitable gift of up to $100,000 directly from their IRA to a qualified charity without paying income tax on the distribution.

"Before this law took effect, if you were considering a gift to charity from your IRA, you had to withdraw the money out of your IRA, which then needed to be reported as taxable income," said Jim Hoobler, Director of Ohio State's Office of Planned Giving. "The IRA charitable rollover extension allows you to transfer the funds directly from the IRA to Ohio State or the charity of your choice without having to report it as taxable income."

The extension includes a provision allowing a qualified charitable distribution made in January 2011 to be used to satisfy the taxpayer’s minimum distribution requirement for 2010 and also qualify as a gift, up to $100,000, contributed for 2010. The donor may also elect to make a second gift in 2011 up to a maximum of $100,000.

"It’s important to remember that no income tax charitable deduction is permitted since these funds accumulated tax-free within the IRA, and no benefits may accrue to the donor,” said Hoobler. "Even with these restrictions, it's really a great opportunity for people who want to support Ohio State and see their gift being used during their lifetime."

For more information about planned giving and the IRA Charitable Rollover, please contact The Ohio State University’s Office of Planned Giving at (614) 292-2183, (800) 327-7907 or via e-mail at plangive@osu.edu

The above information should not be construed as tax or legal advice and we would encourage you to review this information and any gift plan with your tax and financial advisors before acting on any ideas presented in this article or related information.

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