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CHARITABLE ROLLOVERS
Embedded within the recently adopted 900+ page pension
protection act of 2006 is a useful new charitable planning
opportunity. During 2006 and 2007 an IRA owner 70 years
or older may make a direct transfer/rollover from an
IRA to any public charity of up to $100,000 in one year,
without including such transfer in taxable income. "Qualified
charitable distributions" may only be made to public
charities, not supporting organizations or private foundations
and not "Quid Pro Quo" donations (For Football
tickets). Transfer to a particular scholarship fund
or disaster relief fund is permitted.
IRA owners over 70 must take required
minimum distributions (RMDS) from their IRAS each year,
based on their life expectancies and the January 1 value
of their IRAs. An IRA charitable rollover will satisfy
the donor's RMD. By transferring part of all of their
RMD to charity, without taking the transferred amount
into income, the donors will have a lower taxable income
and taxes.
IRA rollovers gifts could
prove beneficial in various scenarios:
- Convenience. Providing instructions
to your IRA custodian to make a transfer to a public
charity is simple and painless.
- Generous donors. Annual charitable
contributions deductions are limited to 50% of adjusted
gross income (AGI) (Subject to a 5 year carry forward
of excess amounts). Direct IRA transfers would still
enable donations of up to 50% of AGI from regular
non IRA assets. Since the IRA rollover is not included
in AGI, it will have no impact on regular income tax
or charitable gift limitations.
- Major Donors. Itemizers who
bump into AGI ceilings on deductions can use direct
IRA transfers to make additional tax-wise gifts.
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- Because direct IRA transfer
are not taxable income, such transfers offer
the equivalent of additional charitable deductions.
- Donors who have a carryover
from excess charitable gifts in prior years
could make the direct IRA transfer and still
use the carryover amount in the current year.
- Certain deductions are
limited based on a taxpayer's AGI.
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- In 2006, married taxpayers
with AGIs over $150,500 are subject to a "haircut"
of their itemized deductions of up to 2% (Formerly
3%).
- With AGIs over $218,950,
personal exemptions start to phase out.
- The 10% AGI floor on
casualty loss, the 7% floor on medical expense
and the 2% floor on miscellaneous itemized deductions,
all are harder to satisfy as AGIs increase.
- It is "Tax Friendly"
that the direct IRA charitable transfers do
not increase AGI.
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- Social Security recipient donors.
As AGIs increase above $32,000 and $44,000, first
50%, then 85% of Social Security benefits taxable.
The IRA transfer does not increase AGI and will not
affect the taxability of Social Security benefits.
- Standard deductions donors.
The approximately two thirds of taxpayers who take
the standard deduction, and therefore do not deduct
charitable gifts, can not get the equivalent of a
deduction by making direct IRA transfer to public
charities. Not being taxed on income is the equivalent
of a deduction.
The $100,000 IRA charitable rollover/transfer
opens up many flexible new gifting opportunities. Hopefully
it will be continued beyond 2007. As the amount of assets
housed within IRAs continues to grow and the "baby
Boomers" continue to age, many major charitable
giving opportunities will present themselves. Please
contact us if you would like to discuss this further.
Please
consider making the ACC Foundation a part of your
annual giving. If you would like to make a contribution
online to the Alamance Community College Foundation,
please click on the Network For Good icon at the
top. This site will securely process your donation
to the Alamance Community College Foundation,
Inc.
If you would like to make
a difference in the life of a deserving student
through the ACC Scholarship Fund or through any
of the named scholarships, please complete the
pledge form and send through e-mail to the ACC
Foundation. You will be billed from the ACC Foundation
office.
Gifts can be made in memory
or honor of a loved one, friend, instructor or
whoever you want. When you make a gift in memory
or honor include the the name of who is being
honored/memorialized and who will need to be notified
of this gift.
You can print
out the form and mail your pledge to:
ACC Foundation
P.O. Box 8000
Graham, NC 27253-8000
Your support of the College
is helping Alamance Community College help students
achieve their educational goals. Please consider
including Alamance Community College in your estate
plans and let us know when you do. Thank you! |
During 2006-2007, while continuing
to meet the need of all qualified students who applied
for ACC Foundation funds, the Foundation was also able
to be the conduit for or assist with securing grants
and funds to enrich educational opportunities for students.
There is much to celebrate:
- a significant increase in the
endowment to support the Scott Family Collection at
ACC
- a major grant from Duke Energy
to upgrade the equipment in the machining curriculum
to meet the needs of area employers such as GKN, Honda
and Sandvik
- support from various individuals
in the community to assist select students in the
ACC Horticulture program to successfully compete in
a national event against four- year universities.
Looking ahead, in celebration
of the 50th anniversary of the College in 2008 and the
25th anniversary of the ACC Foundation in 2008, the
ACC Foundation will be conducting a special naming opportunities
campaign.
For gift of $50,000, donors will
be able to name existing lab space on campus and for
gifts of $25,000, donors will be able to name existing
classrooms. Larger gifts will be commensurately rewarded.
Funds will go to the Foundation
primarily to support scholarships, faculty/staff professional
development and other educational activities. Donors
will have five years to complete a pledge. We will be
in the quiet phase of the campaign until January 2008,
at which time we plan to be able to announce several
significant gifts with the kick-off of the anniversary
year. |
