The Charitable IRA Rollover Gift

Tax-Free Distributions from Individual Retirement Accounts

The IRA charitable rollover is an excellent way to make gifts to Ohio Wesleyan this year and next. If you are considering donating funds from an IRA, we will be happy to provide you more detailed information about how this would work for you. See attached sample of a letter that could be sent to your plan administrator. Click here to see an example (14k PDF*).

Key Requirements

• The Donor must be over age 70 ½ on the date the distribution is made.
• The distribution must be from a traditional IRA or Roth IRA.
• The distribution must be made directly by the IRA administrator to the charity.
• The distribution would have been taxable to the Donor if distributed to the plan participant.
• Distributions may be made to organizations described in section 170(b)(1)(A), including public charities and certain private operating foundations. Ohio Wesleyan University is a public charity.
• Distributions can count towards the Donor’s mandatory minimum distribution requirement as long as the Donor has not yet taken a distribution from the IRA in the year of the gift.

Through the Emergency Economic Stabilization Act of 2008, Congress has extended legislation allowing Donors over age 70 ½ to direct their IRA administrators to make distribution up to $100,000 each year from their IRAs to a public charity such as Ohio Wesleyan. These distributions will NOT be included in the Donor’s income for tax purposes, but may count towards the Donor’s the mandatory minimum distribution. The new law extends this opportunity through 2008 and 2009.

Distributions must go directly to the charity for the funds to be excluded from the Donor’s income. Please note that the distribution must come from traditional IRAs or Roth IRAs only. Other forms of retirement plans such as 401(k), 403(b) annuities, defined benefit and contribution plans, profit sharing plans, Keoghs and employer sponsored SEPs and SIMPLE plans are NOT eligible.

Extension of these provisions of The Pension Protection Act of 2006 has re-opened the door on a very attractive way to make tax-advantaged gifts to charities like Ohio Wesleyan. Please feel free to contact the Office of Gift Planning at 740-368-3078 or by e-mail at giftplanning@owu.edu if you would like to further information.

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