IRA Charitable Rollover Provision Renewed for Individuals Age 70½ or Older

Legislation enacted on October 3, 2008, contains a provision that allows an exclusion from gross income for certain distributions of up to $100,000 to Purdue University or the Purdue Research Foundation in 2008 and 2009 by individuals age 70 ½ or older from their traditional individual retirement accounts (IRAs) or Roth IRAs, which would otherwise be counted as income. It should be noted, however, that there is no charitable contribution deduction for the distribution.

This means you can make a lifetime gift and direct it to the school, college, or program of your choice* using funds from your IRA without experiencing any undesirable tax effects. Without this legislation, you would have had to report any amount taken from your IRA as taxable income. You then would have received a charitable deduction for the gift, but only up to 50 percent of your adjusted gross income.

            IRA Charitable Rollover Provision Eligibility

You can now make a gift from your traditional or Roth IRA without such tax complications if …

• You are age 70½ or older by the date of the distribution
• Your gift each year is $100,000 or less (and counts toward the minimum required distribution)
• You make the transfer on or before December 31, 2008, and December 31, 2009
• You transfer funds directly from a traditional IRA or Roth IRA to Purdue University or Purdue Research Foundation (Please note that the Purdue Foundation is NOT an eligible recipient as it is considered to be a support organization.)

Only the taxable portion of any IRA or Roth IRA distribution qualifies for the exclusion. It is important to note that any quid pro quo benefit you receive in return for the distribution disqualifies the entire distribution from the gross-income exclusion.

You may find these sample letters to be helpful in facilitating your IRA Charitable Rollover distribution:

• Letter to IRA Plan Administrator
• Letter to Purdue Directing Your Gift
  

Checks can be mailed to the address below:

Purdue University
Dick and Sandy Dauch Alumni Center, Room 3124
403 West Wood Street
West Lafayette, IN 47907-2007

*PLEASE NOTE that while most areas within Purdue University are eligible to receive these funds, there are some (i.e. John Purdue Club, Purdue Convocations, and Purdue Theatre) that provide intrinsic benefits in exchange for your financial support, making them ineligible for this type of distribution.

For More Information …

Please contact Gordon Chavers at (800) 677-8780 or gchavers@purdue.edu with any questions you may have about the IRA Charitable Rollover provision.

This information is not intended as legal, accounting, tax, investment or other professional advice.