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A great way to make your Torchbearer
gift, create a scholarship fund or complete a past pledge…
On October 3, 2008, President Bush signed the Emergency
Economic Stabilization Act of 2008 which includes a
provision for IRA charitable rollovers, formally known as
qualified charitable distributions. The legislation enables
individuals aged 70 ½ or older to make qualified charitable
distributions directly from their Individual Retirement
Accounts (IRA) to the charity of their choice.
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For Annual Fund gifts, please call Craig Arteaga-Johnson,
Director of Annual Giving, at (909) 621-8142.
For scholarships or other endowed funds, call John Norton,
Assistant Vice President, at (909) 607-7441. |
The Emergency Economic Stabilization Act of 2008 extends the
IRA rollover option created by the Pension Protection Act of
2006. Prior to the Pension Protection Act, such a charitable
contribution required two steps: donor first had to report
the IRA withdrawal as income and then take an income tax
charitable contribution deduction. Those taxpayers facing
reductions on their deductions could not completely offset
the income tax cost of their IRA withdrawal with a
corresponding deduction for their gift to charity.
The IRA rollover provides an easy way for you to make a
charitable gift of an IRA asset; qualifying donors can
direct a qualified charitable distribution to go directly to
Pomona or another charity. The simplicity of the qualified
charitable distribution is the greatest benefit of such a
gift because there is no federal income tax event for the
IRA owner.
Important points to consider:
- You must have reached the minimum age of 70 ½ at the
time of the transfer.
- Transfers must be made from a traditional or Roth IRA
account by your plan provider directly to Pomona College.
Funds that are withdrawn by you and then contributed do not
qualify.
- Gifts from 401k, 403b, SEP and other retirement plans do
not qualify.
- IRA charitable transfers may be any amount up to a maximum
of $100,000 per taxpayer per year.
- Gifts must be outright to qualified charities; you are not
allowed to direct these gifts to a charitable remainder unitrust, gift annuity, donor-advised fund or other
supporting organization.
- Such a gift must be completed by December 31, 2009, for the 2009 tax
year; the rollover option then expires on December 31, 2009.
- No charitable income tax deduction is allowed for these
gifts (since they come from “pre-tax” funds).
- Your gift in the form of a qualified charitable
distribution from your IRA to Pomona will not be subject to
income tax on your tax return.
Benefits--Qualified charitable distributions:
- Can total up to $100,000 in each tax year (if your spouse
has a separate IRA account, you can each contribute up to
$100,000 per tax year);
- Can be excluded from your gross income for federal income
tax purposes on line 15a of Form 1040 (no charitable
deduction is available, however);
- Can be used to satisfy your Minimum Required Distribution
(MRD);
- Are not subject to the 50% deductibility ceiling or the 2%
rule.
Example: Mary Sagehen has $500,000 in an IRA and will be
required to withdraw approximately $25,000 this year, and
she also wants to contribute $20,000 to Pomona College. She
can authorize the administrator of her IRA to transfer
$20,000 to Pomona and $5,000 to herself. The $20,000
distributed to Pomona will not be subject to tax and will be
counted toward her annual minimum distribution.
If you are interested in completing such a gift, we’ve
provided several resources for you:
Letter 1
This is a letter template for you to use
to instruct your IRA custodian or administrator to direct a
qualified charitable distribution to Pomona.
Word document
| PDF
Letter 2
This is a letter template for you to use
to alert us so that we can be looking out for your expected
gift.
Word document
| PDF
Gift Acknowledgement
This is a draft sample of a gift acknowledgement
that we will send to you when you complete your gift of an
IRA qualified charitable distribution. We will also forward
a confirmation receipt to your IRA custodian or
administrator.
Word document
| PDF
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