Take advantage of extended IRA charitable rollover by year end

November 19, 2011

As a result of the extension of the Pension Protection Act through 2011, anyone over the age of 70 ½ can now make an outright gift to a qualified charitable organization, such as Optometry Cares®-the AOA Foundation, by requesting a direct transfer of up to $100,000 from an individual retirement account (traditional or Roth IRA) without paying taxes on this distribution.

Foundation donors have found these gifts can be accomplished simply and can maximize the benefits of IRA dollars that would have been taxable in the past. 

Here is how it works:

1. The donor must be 70½ at the time of transfer. The gift must be made on or after the donor turns 70½ to ensure favorable tax treatment for that tax year.

2. The transfer must pass directly from the IRA custodian to the qualifying charity.

3. The transfer is limited to $100,000 per tax year.

4. The transfer must occur before Dec. 31, 2011, when the provision is scheduled to expire.

5. The transfer is limited to 50 percent of adjusted gross income (AGI) like other cash gifts.

6. The Act applies only to traditional, rollover, and Roth IRAs, not to other types of plans like 401(k), 457, 403(b), etc. However, funds from the other types of retirement plans may be rolled into a traditional IRA in order to make the gift.

7. The transfer cannot be made to a donor-advised fund or a supporting organization.

8. The transfer cannot be used to fund a charitable gift annuity or a charitable remainder trust.

To make your gift through the IRA Charitable Rollover provision, contact your broker or accountant. Contact Dennis Holter, chief advancement officer at the AOA Foundation, at 314-983-4138 with any questions.

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