IRA Gifts
On October 3, 2008, Congress extended an excellent charitable planning opportunity for both 2008 and 2009. The new law once again allows charitably minded individuals a golden opportunity to make gifts from their IRAs and exclude the amount of their gifts from gross income. To qualify:
- The donor must be 70 1/2 years of age or older;
- The transfers must go directly from the IRA to qualified charities;
- Gifts cannot exceed $100,000 per taxpayer per year;
- Gifts must be outright, not to donor advised funds, charitable remainder trusts, or for charitable gift annuities;
- And, remember, gifts of $100,000 may qualify for Florida’s matching gift program.
This opportunity is available only for 2008 and 2009, and no charitable income-tax deduction is allowed.
Congress has waived minimum required distributions for 2009. A gift from your IRA will reduce the minimum distribution you will be required to take from your IRA in the future.
Without this provision, if an individual withdrew up to $100,000 from his or her IRA and contributed it to charity, he or she would first have to include the $100,000 in his or her income. The individual would also be treated as having made a charitable contribution for the amount donated to charity. However, IRS rules limit the amount of charitable contributions of cash that can be deducted in a given year to 50% of adjusted gross income. Therefore, without the provision, it is possible that an IRA gift would not result in a "wash", and the donor might incur extra taxes as the result of the gift. The new provision ensures that problem will not occur.
So, who benefits from this new provision?
The new law presents a wonderful opportunity until the end of 2008 and 2009 for individuals to utilize their IRAs creatively to accomplish special philanthropic objectives.
- Individuals who usually give up to 50% of their adjusted gross income (AGI)—the ceiling on the allowable charitable deduction for any year—can now give up to $100,000 more from their IRA accounts, which is not subject to this limitation or taxed as a distribution. This could enable taxpayers to avoid up to $35,000 ($100,000 x 35%) in federal income tax on IRA distributions for this and next year.
- Individuals who do not itemize and who make a charitable gift in an amount less than the standard deduction ($11,400 for married couples, $5,700 for single filers) will benefit from a transfer directly from their IRA to charity.
If you decide to make an IRA gift, the first step will be to direct your IRA plan trustee/ administrator to make a distribution to the University of Florida Foundation. A form letter that may be used for that purpose is available online: PDF | MS Word.
You should also contact us and let us know that we will be receiving a gift. A form letter for that purpose is also online: PDF | MS Word.
Please call if you have questions or if we can assist you in any way.
Planned Giving Officers:
| George Cawthon | Dan Ott |
| Doug Medlin | Danny Ferrell |
Phone: (352) 392-5512
Toll-free: (866) 317-4143
Fax: (352) 392-8736
www.uff.ufl.edu
Make a Gift Online