IRA CHARITABLE ROLLOVER – TAX BENEFITS FOR 2009
Use Your IRA To Make a Tax-Free Gift to NYU!
Here’s some exciting news to help you plan a tax-effective strategy for your IRA in 2009. As part of last year’s financial rescue bill, Congress extended the tax advantages for individuals who make a charitable gift from their IRA account.
If you are 70 ½ years of age or older, you can make your gift to NYU from your IRA – entirely tax-free.
You can use your IRA charitable distribution to make your annual gift, satisfy your current pledge, or establish or add to a named scholarship or other permanent fund at NYU.
Here’s how it works: The IRA charitable gift provision allows otherwise taxable distributions from your IRA account to be excluded from your taxable income. (Because your IRA charitable gift is entirely excluded from taxable income, you do not obtain a federal income tax deduction for this IRA contribution.)
Congress’ extension of this giving opportunity offers a welcome incentive to donors who want to use the money in their IRAs to make charitable gifts. The legislation makes the process simple and assures these donors that their gifts will not increase their taxes.
Bear in mind that in 2009 -- unlike past years -- you aren’t required to take an income distribution from your IRA. (That’s another aspect of the financial rescue bill.) But you may still find your IRA to be the best source for your giving this year. For eligible donors, this can be the most tax-wise way to make a charitable gift to NYU – whether it’s your annual gift, a payment on an existing pledge, or your gift to establish a scholarship or other named fund.
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The IRA charitable gift may be a particularly attractive tax strategy for the following donors:
- Donors who don't need or want to take the required annual minimum distribution from their IRA.
- Donors whose income level is high enough to start “phasing out” their itemized deductions (married/joint filers at approximately $140,000; single filers at approximately $70,000).
- Donors who don't itemize their deductions.
- Donors for whom additional income will cause more of their Social Security income to be taxed.
As with any arrangement that qualifies for favorable tax treatment, there are a few restrictions and conditions:
- You must be 70½ years of age.
- The limit for IRA charitable gift tax treatment is $100,000 per person per year.
- You must instruct your IRA custodian to make the distribution directly to NYU.
- Only outright charitable gifts are permitted. (Life-income gifts, such as charitable gift annuities or remainder trusts, are not permitted)
- Only gifts to public charities are permitted. (Gifts to donor-advised funds or private foundations are not permitted)
- You must make your gift from an IRA account. (Gifts from a 401(k) or 403(b) account are not permitted)
How to make your IRA charitable gift to NYU:
Instruct your IRA custodian to make a direct distribution from your IRA account to New York University. Contact your IRA custodian and request a form that contains the instructions for an IRA charitable gift. These forms are usually available through the custodian's toll-free customer service phone number, or on its website.
Instruct your IRA custodian to send the distribution check to the following NYU address:
New York University
Office of Gift Administration
726 Broadway
2nd Floor
New York, New York 10003
(Tax ID 13-5562308)
Instruct your IRA custodian to identify you as the IRA account owner/donor – with your name and address – on its distribution check or accompanying materials.
Inform us that you are making an IRA charitable distribution by contacting Alan Shapiro, NYU Director of Gift Planning,
at (212) 998-6960 or by emailing him at gift.planning@nyu.edu.
Please call or email Mr. Shapiro if you have questions about the IRA charitable gift or for assistance with the gift process.
Thank you for your support of NYU!