Wednesday, October 8, 2008
We would like to inform you that you once again have the opportunity to make a gift to the American Technion Society (ATS) from your individual retirement account (IRA) while also enjoying a federal tax benefit. If you are at least 70.5 years old, for the last few months of 2008 and all of 2009, you may be permitted to make tax-free contributions of IRA proceeds to a charitable organization if you direct the funds directly to a charity like the ATS.
What does the new law mean for you?
Without this law, withdrawals from IRAs for charitable gifts are taxable to the donor. Under this law, if you are at least 70.5 years of age and have an IRA, you will be able to make a tax-free gift of up to $100,000 per year to the ATS until the end of 2009.
Moreover, the amounts given to the ATS under this provision will count in the amount that federal law requires you to withdraw every year from your IRA. Your tax-free gift may be a payment of an existing pledge or a new gift.
How does this work? You must follow the requirements, including:
- The gift may be any amount, up to a maximum of $100,000 per year.
- The gift must be an outright gift, not a planned or deferred gift.
- You may not receive a benefit, like participation in an ATS mission, in return for the gift.
- You must be at least 70.5 years of age.
- The gift must be from your traditional or Roth IRA, as opposed to another type of pension plan.
- The amount you give must be otherwise taxable if distributed directly to you.
- You may make a gift between now and December 31, 2008, and again between January 1 and December 31, 2009, when the law expires.
- You must make the gift directly to charity by instructing your IRA trustee or custodian to distribute the funds directly to ATS or the organization of your choice. (ATS has form letters of instruction if you need them.)
- The gift must be to a qualifying public charity such as the ATS. Gifts to donor advised funds, supporting organizations or private foundations are not eligible.
Donors in an excellent position to take advantage of the Charitable IRA Rollover include those...
➢ who are already giving at their deduction limit.
➢ whose income level causes the phase out of their exemptions or itemized deductions.
➢ who do not itemize their deductions.
➢ for whom additional income will cause more of their Social Security income to be taxed.
➢ who wish to remove up to $100,000 from their taxable estate.
➢ who would like to avoid the possibility that the government will impose taxes of up to 75% on IRA funds not distributed during the donor's lifetime.
To find out whether the IRA rollover law can benefit you, please contact your personal financial advisor, and ask him or her about the extension of the IRA Charitable Rollover under the Emergency Economic Stabilization Act of 2008 (H.R. 1424). If you want to take advantage of the law for 2008, you must act before December 31. Unless Congress makes this law permanent, this may be your last chance to take advantage of this unique opportunity. For further guidance, you may contact me at (212) 407-6313 or at firstname.lastname@example.org. We look forward to hearing from you.