Charitable IRA Distribution Opportunity Now Available
As you may know, the Pension Protection Act of 2006 includes for the first time a provision, sometimes referred to as the “Charitable IRA Rollover” legislation, that allows tax-free lifetime distributions from an IRA directly to charity. Until December 31, 2007, you have a unique opportunity to help the Law School and other charities that benefit from your philanthropy. Here's how:
- You must be age 70 ½ or older as of the date of distribution.
- You may transfer up to $100,000 on or before December 31, 2007.
- Distributions must be made directly from a traditional or Roth IRA to a qualified charity and must be for outright gifts; trusts and other planned gifts do not qualify.
- Distributions will be excluded from federal taxable income. Depending on where you live, you may avoid state income tax on the distributions as well. Note that you will not receive an income tax deduction for your distribution; the amount is simply eliminated from your income tax calculations.
- Distributions will count toward your minimum required distribution.
Note that distributions from qualified plans such as those established under sections 401(k) or 403(b) of the Internal Revenue Code will not qualify for this special treatment.
As you consider your role in the Law School's Capital Campaign focusing on student financial aid and loan forgiveness, tax-free charitable IRA distributions may provide an ideal way for you to contribute to the campaign’s early success. And distributions will count toward reunion and annual giving totals as well.
Because the tax benefits of distributions under this provision will differ based on varying individual circumstances, we recommend that you consult with your tax advisor to learn how distributions will affect your particular situation. In the meantime, please contact Elizabeth Leverage ’92 at the Law School Foundation (eleverage@virginia.edu; 434-924-4514) if you would like to learn more about how this new law might fit into your 2007 philanthropic plans for the Law School and elsewhere.
Many thanks for your interest and support.
The University of Virginia Law School Foundation
The University of Virginia Law School Foundation does not provide legal or tax advice. We recommend that you seek your own legal and tax advice in connection with gift and planning matters. To ensure compliance with certain IRS requirements, we disclose to you that this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties.
