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Charitable IRA Rollover Renewed for 2015

MSU donors over age 70 1/2 can directly transfer gifts ranging from $100 to $100,000 from an IRA account without having to pay income taxes on the amount gifted.

Charitable IRA Rollover

BREAKING NEWS! The charitable IRA rollover has been renewed for 2015 only. Act quickly to complete your gift before the Dec. 31, 2015, deadline.

On December 18, the President signed legislation which contains the re-instatement of the charitable IRA rollover—for tax year 2015 only. The provision allows Michigan State University donors, over age 70 ½, to directly transfer gifts ranging from $100 to $100,000 from an IRA account without having to pay income taxes on the amount gifted.

As in years past, an IRA Charitable Rollover gift may satisfy or count against your required minimum distribution.

Feel free to call the MSU Office of Gift Planning at (517) 884-1000 to learn how the charitable IRA rollover provision can help you support your area of choice at Michigan State University.

To take advantage of the IRA Charitable Rollover provision please refer to the following information:

  1. Donors must be age 70 ½ or older and own a traditional or Roth IRA. Other retirement plans such as pensions, 401(k), 403(b) or other plans are not eligible.
  2. IRA Charitable Rollover gifts may not exceed $100,000 and must be transferred before December 31, 2015.
  3. There is no eligible income tax deduction for the amount gifted.
  4. Only your IRA trustee or plan administrator can transfer the gift directly to MSU. If IRA owners personally withdraw funds and contribute them to MSU, the amount withdrawn will be included in your gross income and subject to income tax.
  5. To make a gift using the IRA Rollover provision, first contact your IRA administrator and authorize them to send a check from your IRA directly to MSU.
  6. Ask your IRA trustee or administrator to clearly reveal this is an IRA Rollover provision gift for 2015 and identify you as the IRA account owner.
  7. Be sure to have your administrator include how and where (designation) MSU is to use your IRA gift.
  8. Send transfer gifts to:
    MSU University Advancement
    c/o Lynn Pfaff
    535 Chestnut Rd., Room 300
    East Lansing, MI 48824
    Or call (517) 884-1024 or (517) 884-1068

Act quickly if you are considering a gift that takes advantage of this popular option—gifts need to be completed before December 31, 2015.

FREQUENTLY ASKED QUESTIONS on IRA Charitable Gifts:

  1. What are the benefits of IRA Charitable gift rollover?
    Under current law, withdrawals from traditional IRAs and certain Roth IRAs are taxed as income, even if they are immediately directed to a charity. The donor receives a tax deduction for his or her donation, but various other federal, and sometimes state, tax rules can prevent the deduction from fully offsetting this taxable income. As a result, many donors have chosen not to use IRA assets for lifetime gifts. The charitable IRA rollover eliminates this problem for a limited time.
     
  2. Who can benefit from using the charitable IRA rollover to make a gift?
    • Persons with significant assets in an IRA
    • Persons making gifts that are large, relative to their income
    • Persons having so few deductions that they choose not to itemize.
     
  3. What gifts would qualify for a 2015 charitable IRA rollover?
    A gift that qualifies, technically termed a “qualified charitable distribution,” would be:
    • Made by a donor age 70 ½ or older
    • Transferred from a traditional or Roth IRA directly to a permissible public charity, 
      such as Michigan State University.
    • Completed in calendar year 2015 for the 2015 tax year.
     
  4. Is there a limit on the amount that can be given?
    Yes, there is a limit. An individual taxpayer's total charitable IRA rollover gifts cannot exceed $100,000 per tax year.
     
  5. What about the required minimum distribution?
    If you have not already taken your required minimum distribution in a given year, a qualifying rollover gift can count toward satisfying this requirement.
     
  6. Is an income tax deduction also available?
    No. The gift would be excluded from income, so providing a deduction in addition to that exclusion would create an inappropriate double tax benefit.
     
  7. What are the benefits that a donor can receive?
    The only permissible benefits from a charitable IRA rollover gift are those that would not reduce the tax deduction. At MSU, a charitable IRA rollover gift is allowed to count toward naming opportunities and toward donor society memberships.
     
  8. If I made a charitable IRA rollover gift in other tax years, can I do this again for the 2015 tax year?
    Yes. Even if you and your spouse both made the maximum $100,000 charitable IRA rollover gift to a qualifying charity during one or more previous years, you can still take advantage of this legislation again for the 2015 tax year.