Gift Planning
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The opportunity to make a tax-free gift from your IRA to Penn State is only available through Dec. 31, 2009, so please take a moment to review the questions and answers below to see whether this easy way to make a difference is right for you.
Q. I've already named your organization as the beneficiary of my IRA. What are the benefits if I make a gift now instead of from my estate?
A. By making a gift this year of up to $100,000 from your IRA, you can see your philanthropic dollars at work. You are jump-starting the legacy you would like to leave and giving yourself the joy of watching your philanthropy take shape. Moreover, you can fulfill any outstanding pledge you may have already made by transferring that amount from your IRA under this legislation as long as it is $100,000 or less for the year.
Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to reach age 70½ by the date you make the gift.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. Under the legislation, gifts can be made from IRAs. Pension, profit sharing, 401(k), 403(b) and other forms of retirement funds do not fall under this tax legislation.
Q. I've heard that under different legislation I don't need to take a required minimum distribution from my IRA in 2009. Can I still use those funds as a gift under the law?
A. Yes, absolutely. The extended law allowing charitable IRA gifts allows you to make a gift from your IRA regardless of whether a minimum distribution was required. Contact your IRA custodian to transfer the desired amount up to $100,000. Your gift is not considered taxable income to you, nor will the amount be tax deductible.
Q. Do I need to give my entire IRA to be eligible for the tax break?
A. No. You can give any amount under this provision, as long as it is $100,000 or less this year. If your IRA is valued at more than $100,000, you can transfer a portion of it to fund a charitable gift.
Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of $100,000 per year. For example, you can give each organization $50,000 this year or any other combination that totals $100,000 or less. Any amount of more than $100,000 in one year must be reported as taxable income.
Q. I'd like to give more than $100,000. How can I do that?
A. If your spouse is 70½ or older and has an IRA, he or she can also give up to $100,000 from his or her IRA.
The Next Step
To take advantage of an IRA rollover for 2009:
1. Download and print the "Notice to IRA Plan Administrator" PDF.
Mail the form to your IRA plan administrator.
2. Download and print the "Notify Penn State Office of Gift Planning" PDF.
Mail the form to the Penn State Office of Gift Planning at:
214 103 Building
University Park, PA 16802
Note: To qualify, distributions must be received by December 31, 2009.
Be sure to contact tax professionals and your IRA administrator if you are considering a gift under this law. Click here to download a PDF of our Charitable IRA Rollover Fact Sheet. Or feel free to call Michael J. Degenhart, Director, or any of the expert gift planning officers in the Office of Gift Planning at Penn State at 888-800-9170 (toll free) or giftplanning@psu.edu with any questions.
Click the icon to request a FREE guide on how you can make tax-free lifetime gifts from your IRA.
Copyright © The Stelter Company, All rights reserved.
The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to income tax apply to federal taxes only. Federal estate tax, state income/estate taxes or state law may impact your results.
