Federal legislation has opened new stewardship opportunities to strengthen ministry! The Emergency Economic Stabilization Act of 2008 allows an individual over the age of 70 1/2 to make a gift up to $100,000 from an individual retirement account (IRA) to ministry without increasing taxable income.
The gift to ministry also counts toward the individual's minimum required distribution. This provision in the legislation is sometimes called the IRA Charitable Rollover.
As part of the Emergency Economic Stabilization Act of 2008, the IRA rollover provision has been extended to tax years 2008 and 2009. The rollover rules work exactly the same as the rules for the previous tax years of 2006 and 2007. Below is a summary of the rules.
Under current law, a donor would have to include the distribution in income and then make a corresponding cash contribution to charity. Although the cash contribution generally would be eligible for a charitable income tax deduction, tax rules may prevent donors from receiving a full deduction in the year of the contribution or may cause donors to have other adverse tax consequences from the income recognition.
Key Points:
Donors who are interested in taking advantage of this special rule should contact their IRA account administrator for the necessary paperwork to complete the transfer. We recommend that you ask donors to also copy the ministry on the transfer information. This allows gifts to be matched with donors if the check is sent to the ministry without a donor’s name.
Click here to find out how you can take advantage of the IRA Rollover opportunity.
Donors should act quickly if they would like to tax advantage of this special rule in 2008. To ensure that the transfer qualifies, the check from the IRA account administrator should be received by the ministry by December 31, 2008, or at the very least mailed to the ministry with a U.S.P.S. post-mark date of December 31, 2008 or earlier.