How it works
Briefly, donors aged 70½ or older on the date of the distribution may transfer up to $100,000 each year directly from an IRA to a qualified charity such as KU Endowment.
To qualify for the 2011 tax year, transfers must occur by Dec. 31, 2011.
The distributions are not subject to income tax, and the subsequent gifts are not tax-deductible, making these “tax neutral”
The gifts may not involve any quid pro quos. In other words, they may not be used to receive priority points from KU Athletics, or for life income arrangements, such as charitable gift annuities or charitable remainder trusts. The Act also specifically EXCLUDES gifts to donor-advised funds and supporting organizations.
Also, it is very important to note that these distributions must
come directly from your IRA custodian to KU Endowment. If you take possession of the distribution and then make a gift, the withdrawal will become part of your adjusted gross income for the year.
This means of giving most likely appeal to donors who want to make a gift to KU Endowment and who:
- don’t need additional income; or
- are already giving at their 50 percent deduction limit. These donors can now transfer up to $100,000 more from their IRAs. This distribution is not subject to deduction limitations, nor is it taxed as income; or
- are subject to the phase-out of their exemptions. This rule requires that itemized deductions be reduced when adjusted gross income exceeds certain levels. Distributions do not increase adjusted gross income; or
- don’t itemize their deductions, and who make a gift in an amount less than the standard deduction.
The Office of Planned Giving staff
is ready to consult with you and/or your adviser about a tax-free IRA transfer to KU Endowment, and to help with any questions about other forms of charitable giving that may benefit you, your family and the University of Kansas.
The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.