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Congress extends IRA Charitable Rollover for 2015 and Beyond

on Fri, 12/18/2015 - 19:28

On Friday, December 18, 2015, Congress passed budget legislation that includes a permanent extension of the IRA charitable rollover. While the President must sign the bill into law as a final step, The White House has indicated that President Obama supports the bill. 

If approved in its current form, the new law does not have an expiration date. It is retroactive to January 1, 2015, and will be in effect for the remainder of 2015 and beyond.

If the legislation is signed by the president, individuals aged 70 ½ or older may transfer up to $100,000 from their IRAs directly to a qualified charity, such as the West Virginia University Foundation, and will not have to pay income tax on this rollover.

Here are some important points:

  • The donor must be age 70 ½ or older on the day of the gift.
  • The donor transfers up to $100,000 directly from the donor’s IRA to one or more qualified charities, such as the WVU Foundation. This is available only to Individual Retirement Accounts, and not to other types of retirement plans.
  • The donor DOES NOT pay income tax on this gift. The transfer generates neither taxable income nor a tax deduction, so a donor benefits even if they don’t itemize their deductions.
  • This transfer can satisfy all or part of the required minimum distribution for the year.
  • Transfers from an IRA may not be used to fund a gift annuity or charitable remainder trust.
  • Unlike in past years, this legislation has no expiration date. But to satisfy part of the required minimum distribution for 2015, the transfer must be complete in 2015.
  • If a donor is a resident of West Virginia, the state provides no income deduction for charitable contributions. So donors will save taxes by making a transfer from their IRA rather than from their checking account. Similar situations exist in Ohio, Indiana, Massachusetts, Michigan, and New Jersey. As always, donors should consult their tax advisor or financial planner.

Please contact the WVU Foundation’s Office of Planned Giving at 800-847-3856 for additional information on making an IRA Charitable Rollover to benefit some part of West Virginia University.