IRA CHARITABLE ROLLOVER
LAW EXPIRES AT END OF 2007
Federal Legislation Allows Tax-Free
IRA Rollover Gifts to CharityEnhanced Ability to make Increased Gifts to Lyric Opera
for the remainder of 2007 only
- Until December 31, 2007, anyone age 701/2 and older can make an IRA rollover gift to Lyric Opera of up to $100,000. (There is no IRA withdrawal tax and no charitable deduction for these kinds of gifts.)
- But this law expires at the end of 2007. Until then, you can directly rollover your IRA funds – tax free – as a gift to Lyric Opera. Simply contact your IRA fund Administrator for the applicable rollover forms.
We urge you to call Lyric's Director of Planned Giving,Jonathan Siner, with questions.He can be reached at (312) 827-5677 or jsiner@lyricopera.org.
Q: I have extra funds in my IRAs which I would like to contribute to Lyric Opera. Under prior law, the funds I would take out of my IRA to give to Lyric were treated as an IRA withdrawal and taxable to me. Is there anyway I can use my IRA for a gift to Lyric Opera without having to pay tax on it?
A: Good news! On August 17, 2006 President Bush signed the Pension Protection Act which, for the first time, allows taxpayers aged 70½ and older to make an IRA rollover gift to charity of up to $100,000, without paying income tax on the IRA funds. Because there is no longer a tax, there is also no charitable deduction or benefits for these kinds of gifts. But the important thing is that you can now rollover your IRA funds – tax free –– to make a gift to Lyric Opera. Simply contact your IRA fund Administrator for the applicable rollover forms.
This special provision is particularly attractive to all taxpayers with excess IRA funds and for those who do not itemize their income tax deductions. For those with extra IRA funds, their mandatory IRA withdrawals can now be rolled over to charity, and no tax will have to be paid on the mandatory withdrawals. Those taxpayers who do not itemize were never able to take advantage of the charitable deduction, but formerly had to pay taxes on their IRA gifts to charity. Now they no longer have to.
This law is effective only for 2006 and 2007. It is applicable solely to make direct gifts to charity, not for planned gifts such as Charitable Gift Annuities or Charitable Remainder Trusts. Those can still be made, tax–free, from non–IRA funds using appreciated stock with no capital gains tax and a significant charitable deduction.
If you would like further information about rolling over your IRA to make a gift to Lyric, or any other kind of planned gift, please contact Lyric's Director of Planned Giving, Jonathan Siner, at (312) 827-5677 or at jsiner@lyricopera.org.
