IRA CHARITABLE ROLLOVER

December 21, 2016

Dear Louisville Orchestra Supporters,

We are very pleased to learn from the League of American Orchestras the details of the FY16 funding agreement approved by Congress with a provision which has potential significant benefits for some of our donors.

After many years of last-minute renewals, Congress has made permanent the IRA Charitable Rollover agreement which allows people 70 ½ years of age or older to transfer up to $100,000 of tax-free gifts from their IRA to their favorite charity. This has proven to be a significant incentive for donors to make new and increased contributions to orchestras throughout the nation.

The provision mandates the following:

  • Eligibility Age. Taxpayers age 70½ and older are required to make annual distributions from their IRAs which are then included in the taxpayers’ adjusted gross income (AGI) and subject to taxes. The IRA Charitable Rollover permits those taxpayers to make donations directly to charitable organizations from their IRAs without counting them as part of their AGI and, consequently, without paying taxes on them.
  • Annual Cap. A donor’s total combined charitable IRA rollover contributions cannot exceed $100,000 in any one year.
  • Eligible Charities. Charitable contributions from an IRA must go directly to a public charity that is not a supporting organization. Contributions to donor-advised funds and private foundations, except in narrow circumstances, do not qualify for tax-free IRA rollover contributions.
  • Eligible Retirement Accounts. Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible for the tax-free treatment.
  • Directly to the Charity. Distributions must be made directly from the IRA trustee payable to the public charity.
  • No Gifts in Return. Donors cannot receive any goods or services in return for charitable IRA rollover contributions in order to qualify for tax-free treatment.
  • Written Receipt. In order to benefit from the tax-free treatment, donors must obtain written substantiation of each IRA rollover contribution from each recipient charity.

The added incentive for using this rollover provision is that it allows eligible donors the opportunity to increase the size of their contribution since it is a tax-exempt distribution.  We are happy to report that we have donors doing just that.

We hope that our eligible donors will consider this carefully and take advantage of this wonderful opportunity to increase their support of the Louisville Orchestra,

If you have any questions, please call Ed Schadt at (502)648-844.

All Best Wishes for the New Year,

Andrew T. Kipe, Executive Director

 

Click here for more information about the IRA Rollover.