IRA Charitable Rollover

The Council has actively supported extending and expanding the IRA charitable rollover since its inclusion in The Pension Protection Act of 2006 (PPA). We know this provision is particularly important to our community foundation members, and we will continue to be engaged in this legislation as it moves forward in the 113th Congress.

Prior to 2006, taxpayers wishing to transfer Individual Retirement Account (IRA) assets to charity first had to recognize the amount as income, make a transfer, and then claim a charitable deduction for the amount gifted. This often resulted in tax liability, even though the donor ultimately transferred the entire IRA distribution to charity. PPA partially solved this problem by allowing taxpayers age 70 ½ or older to transfer up to $100,000 annually from their IRA accounts directly to charity without first having to recognize the distribution as income. Since its passage, the rollover provision within the PPA has proven to be very popular with taxpayers and beneficial to charities. Yet the provision remains limited in several respects: it is limited to taxpayers age 70½ or older; the amount of gifts is capped at $100,000; and donors are specifically not permitted to make charitable rollovers to donor-advised funds, supporting organizations, and private foundations. Also, because the provision was only temporary, the IRA rollover provision must be extended regularly or it will cease to exist as an option for donors. The Council joins with others in the field who support making the IRA charitable rollover permanent and expanding its application to a greater number of taxpayers by dropping the age threshold and extending the organizations eligible for transfer of the IRA distribution to additional organizations including donor advised funds, supporting organizations and private foundations. The Council supports the position that these actions would increase charitable giving and promote more equitable tax policy.

Sen. Charles Schumer (D-NY) reintroduced the Public Good IRA Charitable Rollover Act (S.1772) on November 21, 2013. The bill would permanently extend the charitable IRA rollover incentive, eliminate the $100,000 cap on rollovers, allow donors to make rollovers beginning at age 59½, and permit rollovers to donor-advised funds, supporting organizations, and private foundations.

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