Friday, December 17, 2010

IRA Rollover Extended For 2011

On the afternoon of December 17, 2010, the President signed into law The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This bill restored the IRA Charitable Rollover for 2010 and permits its use in all of 2011.

The principal rules for direct transfers from an IRA to a qualified public charity are that the IRA owner must be 70½ or older and that the transfer is for no more than $100,000 each year. A 2011 transfer qualifies for the required minimum distribution. It must be to a public charity either outright or for a specific purpose, but may not be to a donor advised fund or supporting organization. The transfer is made directly from a trustee to the charitable organization. GiftLaw Pro Chapter 4.6.8 covers the specifics of the IRA Charitable Rollover.

Donor IRA Rollover Marketing

GiftLegacy users should use their Manager program to access IRA marketing materials and to highlight the IRA rollover on their website and eNewsletter headers for both donors and professional advisors (both GiftLegacy and GiftLaw). You may copy the text from the donor email below into your website with the GiftLegacy Manager and to your GifLegacy and GiftLaw eNewsletter headers. All charities should send an email to donors to inform them about this opportunity. The email could include the following information. Please include your name, address and tax ID number in the IRA Custodian email.

Donor email

If you own an IRA and are over age 70½, you may transfer up to $100,000 directly from your IRA to _____________ because we are a qualified charity. Your IRA rollover gift will qualify for your 2011 required IRA distribution and may reduce your income taxes. Even if you have taken your required IRA distribution, you still may find the IRA charitable rollover a very convenient way to make a year-end gift. Thanks very much for your support.

An easy way to start an IRA Charitable Rollover is to send an email to your IRA Custodian. This is usually a financial services company that manages your IRA. Please check their website for the correct email address. Here is a sample email. If you use this email, please enter your account number in the blank.

Dear IRA Custodian,

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, effective until December 31, 2011, permits a rollover directly from an IRA to a qualified public charity. As the owner of IRA account #_________________ that is in the custody of your organization, I request that you transfer from that account the sum of $_________________ to Favorite Public Charity, 123 Oak Street, Chicago, Illinois 52001. The Treasury Tax ID Number for Favorite Public Charity is 00-0000001.

It is my intention to make a Qualified Charitable Distribution (QCD) to Favorite Public Charity from my IRA, which may fulfill part or all of my IRA required minimum distribution for this year.

This letter is sufficient authorization for you to make this QCD gift. However, if you require any further documents, please promptly email those to me.

Cordially yours,

IRA Owner