IRA Rollover FAQ
What is the IRA Rollover Gift Opportunity?
Individuals 70.5 years old or older may rollover up to $100,000 in 2013 from an individual retirement account (“IRA”) or Roth IRA directly to a qualifying charity without recognizing the transfer to charity as income – thereby making a tax free gift from an IRA account.
How does this differ from IRA gifts made before prior to the Rollover provision?
Traditionally, gifts of IRA assets work as follows: Your IRA withdrawal is treated as income, subject to income tax, and then you earn an offsetting tax deduction in the amount of the charitable contribution, subject to deduction limitations (“Traditional IRA Asset Gift”). Under the current legislation, a qualifying IRA rollover gift to charity has no income or tax consequences to the donor.
When must you be 70.5 years old to qualify for the IRA rollover opportunity?
At the time of the gift.
What organizations can receive IRA rollover gifts?
You may make contributions directly to public charities, other than supporting organizations. So IRA rollover gifts made to either the OHSU Foundation or the Doernbecher Children’s Hospital Foundation (“Doernbecher Foundation”) qualify.
IRA rollover gifts may not be made to private foundations or donor advised funds, including donor advised funds held by public charities like the OHSU Foundation.
Can you make an IRA rollover gift to establish an irrevocable life income gift, like a charitable trust or gift annuity?
Unfortunately no. The IRA rollover opportunity is expressly limited to current outright gifts.
Can your IRA rollover gift be made to a designated area or fund at OHSU or Doernbecher?
Yes, outright gifts to the OHSU Foundation or Doernbecher Foundation for a specific area or fund at OHSU or Doernbecher are permissible. Please work with the development staff to direct your gift.
Which retirement accounts can IRA rollover gifts be made from?
IRAs and Roth IRAs only. The law does not permit tax free gifts from other types of retirement accounts like 401(k) plans, 403(b) plans, PERS, defined benefit and contribution plans, profit sharing plans, or employer sponsored SEPs (unless the employee has retired and the employer is no longer making contributions) and SIMPLE plans.
What is the window of opportunity for an IRA rollover gift?
Any transfers completed during 2013 qualify.
Please Note: the transfers must be completed by the IRA Administrator by December 31st to count for that year, not just requested by that date. Since the transfer may take several weeks, we suggest authorizing IRA rollover gifts by December 1, if possible.
How do you make an IRA rollover gift?
You authorize your IRA administrator to make a distribution directly to charity. Your IRA administrator should also have a form for rollover gifts as well, which is usually available on their website.
Please note: you may not receive IRA funds from your IRA administrator and then endorse, forward or give funds to charity and receive the tax free benefits of the IRA rollover opportunity. A gift made this way will be treated as a Traditional IRA Asset Gift described above.
What is the maximum tax free IRA rollover amount you can give per year?
Up to $100,000 in 2013. Please note: this gift opportunity is per taxpayer. So a husband and wife could each contribute up to $100,000 in 2013 for a $200,000 maximum, provided they each had sufficient IRA assets in their names.
Can you make IRA gifts larger than $100,000?
Yes, however the amount of the gift over $100,000 would be recognized as income (“Surplus Amount”). The first $100,000 would fall under the IRA rollover and the Surplus Amount will be tax deductible and follow the limitation rules under the Traditional IRA Asset Gift scenario.
Are IRA rollover gifts tax deductible?
No. The benefit of this opportunity is that the IRA assets are not treated as income and are therefore tax free (i.e. there are no tax consequences at all). That is better than treating the gifted assets as income, being taxed and receiving a tax deduction with the accompanying limitation rules under the Traditional IRA Asset Gift scenario. Receiving both tax free treatment and a tax deduction would be a prohibited double benefit.
Is an IRA rollover gift tax free for both Federal and State tax purposes?
Yes in Oregon, because Oregon follows the definition of federal taxable income. Therefore, since charitable IRA rollover contributions are not taxable for the IRS, they are likewise not taxable for Oregon.
Yes in Washington, because there is no state income tax in Washington.
Does the OHSU or Doernbecher Foundation provide IRA rollover tax advice to donors?
No. You will need to work with your professional advisors to determine the effect of these new rules on your specific tax situation and whether an IRA rollover gift is right for you.
More questions?
Please contact us. We would be happy to help.
Gift Planning
OHSU & Doernbecher Foundations
1121 SW Salmon Street, Suite 100
Portland OR 97205-2021
503-228-1730 / 800-462-6608
pginfo@ohsu.edu
