LACMA

IRA Charitable Rollover Set to Expire December 31, 2009

The legislation that extended the IRA Charitable Rollover to include tax years 2008 and 2009 will expire on December 31

Congress first introduced this excellent charitable incentive for qualifying individual retirement account (IRA) owners in the Pension Protection Act of 2006. Under the new extension, if you are 70 1/2  or older, you can instruct your IRA custodian to transfer up to $100,000 per year directly from your IRA to LACMA. You will not have to report the transfer as income for tax purposes in the year of the transfer. Typically, an IRA withdrawal followed by a charitable contribution would have to be reported as income then deducted as a charitable gift. As such, donors could be precluded from giving due to the 50 percent Adjusted Gross Income limit for charitable deductions. Not so under the IRA Charitable Rollover. Income and deduction limits are unaffected by the transfer. Furthermore, the transfer still counts toward your required minimum IRA distribution for the year.

Only qualified charitable organizations such as LACMA may receive the rollover gift. Donor advised funds and supporting organizations are not eligible, nor can you fund a charitable gift annuity or charitable remainder trust with the transfer. In addition, no benefits for goods and services may be received by the donor in exchange for the transfer. The donor may, however, direct the transfer to a specific LACMA program or area of interest within the museum. Finally, for married couples, both may take advantage of the rollover if drawing from separate IRAs. This is true even in community property states such as California.

Your IRA custodian should have distribution forms you can use to initiate the transfer. If not, you can simply request the transfer in a letter to your IRA custodian. Download a sample letter to your IRA custodian requesting a transfer to LACMA.

LACMA Federal Tax ID: 95-2264067