IRA Rollover Provision Reinstated Through 2009 - Opens up excellent gift opportunities.
Donors will want to explore all of these gift benefits with their advisors and determine their best personal
(Oct. 3, 2008) President Bush has signed into law the $700 billion economic bailout bill (H.R. 1424, Financial
Rescue Package), which includes a two-year extension of the IRA Rollover provision as well as other charitable
giving provisions. The previous provision expired at the end of 2007.
The provision will be made retroactive to Jan. 1, 2008, and will apply to gifts made from that date through
Dec. 31, 2009.
The provision exempts from taxable income any funds transferred (“rolled over”) from an Individual
Retirement Account (IRA) to a charitable organization. The following limitations apply:
• The donor must be age 70½ or older.
• The cap on annual IRA rollovers is $100,000.
• The contribution must be a direct gift to a charity (no planned gifts).
Frequently Asked Questions:
The Buffalo Philharmonic Orchestra is eligible to receive IRA Rollover gifts.
Since the IRA funds are owned by the IRA owner, they may be used to fulfill a legally-binding pledge.
The transfer from the IRA owner to the charity is treated as a receipt of assets followed by a gift from
the IRA owner under Sec. 4975(d)(9). Therefore, the IRA rollover is not a prohibited transaction.
Each year, IRA owners age 70½ and older must take a required minimum distribution (RMD).
Fortunately, the IRA charitable rollover will qualify for the donor's RMD.
By transferring part or all of their RMD to charity, they will have a lower taxable income. This could
both simplify their tax return and reduce income taxes.
The $100,000 limit is for "a taxpayer.” A husband and wife could each give up to $100,000 from two
separate IRA accounts.
As always, we strongly recommend contacting your financial advisor to discuss the benefits of receiving
the full RMD or giving part or all of it to charity.
How to make an IRA distribution:
IRA custodians generally have IRA distribution forms that may be obtained by mail or downloaded from their
web sites. In order to obtain an IRA distribution, many owners will download the distribution form and select
the type of IRA distribution. Since there are a number of options for individuals to take distributions at given
ages and under various exceptions, the distribution forms typically already have three to six options that may be
Most IRA custodians will have added the IRA charitable rollover into the distribution categories. If so, an IRA
owner will select the IRA charitable rollover, designate the charity by legal name, city and state, and enter the
amount of the rollover. The IRA custodian will then make the transfer.
If the IRA custodian does not have a specific form, the IRA owner may send a letter to the IRA custodian. A
sample letter follows this article.
Please alert the Buffalo Philharmonic Orchestra Development Office at (716) 885-0331 x420 that you are
planning to direct an IRA Rollover contribution and state whether it is designated for the Endowment
Campaign’s Challenge or to the 2008-2009 Annual Campaign.
Most IRA custodians transfer IRA rollover funds by check or electronic transfer directly to the charity. If your
IRA custodians sends you the check, as long as the check is issued payable to the charity and you deliver the
check prior to December 31 of the applicable year, this transaction will still qualify under Sec. 408(d)(8) as an
IRA rollover. Delivery may be made by physical transfer to an agent for the charity or by placing the check in
the U.S. mail by December 31 of the appropriate year.
Your IRA rollover is not included in taxable income and consequently there is no income tax deduction.
However, the donor must still comply with substantiation requirements under Sec. 170(f)(8). The BPO will
issue an acknowledgment for the IRA rollover which will include the date of the gift, your designated purpose
of the gift, the name of the IRA custodian, the amount of the gift, that the gift is a qualified charitable
distribution, and state that no goods or services were provided in exchange for the gift.
Because state tax impact varies from state to state, donors are advised to consult their own legal, financial or
estate planning advisors.
RE: Request for Distribution from Individual Retirement Account to the Buffalo
Philharmonic Orchestra, a 501(c)(3) organization Tax ID #16-0755739
Dear IRA Custodian:
Please accept this letter as my request to make a direct distribution from my
Individual Retirement Account Number _______ as provided by Section
408(d)(8) of the Internal Revenue Code of 1986, as amended. Specifically,
please issue a check in the amount of $__________ payable to the following
organization at its address set forth below:
Buffalo Philharmonic Orchestra
499 Franklin Street
Buffalo, New York 14203
In your transmittal to the organization, please include my name and address
as the owner of the Individual Retirement Account in connection with this
transfer as well as any designee or fund, (fund name inserted here).
Additionally, I request that you forward a copy of the transmittal directly to
It is my intention to have this transfer qualify for exclusion during the 2008 tax
year. Consequently, it is critical that this distribution be postmarked on or
before December 31, 2008.
Should you have any questions or need additional information please contact
me immediately at ( ) ____________.
Thank you for your assistance in this matter.