September 15 , 2006

New IRA Law Allows More Tax-Free Charitable Giving

"... People must begin taking disbursements from their IRAs when they reach age 70 l/2.  That income is normally taxable but the new law provides a great new option--the IRA charitable rollover..."

Samford University campusThe law has changed regarding Individual Retirement Accounts (IRAs).  Thanks to a new pension bill passed in August of 2006, you now can make direct transfers to qualified charities such as Samford University.

People must begin taking disbursements from their IRAs when they reach age 70 l/2.  That income is normally taxable but the new law provides a great new option--the IRA charitable rollover. Such rollovers are not taxable up to $100,000.

  • A charitable rollover has several advantages for IRA holders:
  • It is a simple and easy way to make a gift.
  • Because it is not reported as income, it does not increase your taxes.
  • Because it is not reported as income, it won’t increase the tax you pay on Social Security.
  • You may give more than the normal deductible amount of 50 percent of income.
  • It may lower your income and save taxes.

People over 70 1⁄2 should discuss the benefits of an IRA rollover with their tax advisor.

For more information about IRA gifts to Samford, contact Stan Davis, director of gift and estate planning, at csdavis@samford.edu or by calling (205) 726-2807 or toll-free 1-877-782-5867.

More Info