“IRA Charitable Rollover”
Gift Option Ends Soon

You continue to have a special planning opportunity if you are age 70 ½ or older, own an IRA, and intend to make charitable gifts in 2009.

If you meet these requirements, you can make distributions directly from your IRA to one or more charities without the distributions being included in taxable income or being subject to withholding.

Without this “charitable rollover” provision, using IRA funds for a charitable contribution requires withdrawing money from your IRA and then contributing it. The amount withdrawn will be taxable, and the deduction for the contribution may or may not have offset the tax. By contrast, an IRA charitable rollover eliminates the guesswork.

Example: Suppose Jack has $500,000 in an IRA and would like to contribute $25,000 to a particular charity this year. Jack can authorize the custodian of the IRA to transfer $25,000 to the charity. He will not be subject to tax on the $25,000 distributed to charity. (Jack does not deduct the $25,000 gift – by not paying tax on otherwise taxable income, he has already received his tax benefit.)

Making charitable contributions from an IRA rather than other assets may be especially appropriate if you:
• do not itemize deductions,
• would not be able to deduct all of your charitable contributions because of deduction     limitations,
• may lose some of your itemized deductions because of your income level, or

Certain limitations apply to these non-taxable charitable distributions from an IRA:
• They cannot exceed $100,000 per person per year.
• They must be made to a public charity (not a private foundation), and they cannot be     to a supporting organization or a donor advised fund.
• The gifts must be outright. For instance, they cannot be used to establish a gift     annuity or fund a charitable remainder trust.
• No goods or services, such as tickets to an event, can be received in exchange for     the contribution.
• These tax-free distributions can be made only in 2008 and 2009.
• At this point, these tax-free distributions can be made only in 2009.

Indeed, it is currently uncertain whether the IRA charitable rollover option will be renewed for 2010. It appears likely, however, that the minimum distribution requirement for persons over age 70½ that was suspended for 2009 will return next year.

If you would like more information about this and other ways to make a charitable gift from an IRA, please contact Paula Rimmer, Associate Director—Planned/Major Gifts at Seattle Opera, 206.676.5534 or paula.rimmer@seattleopera.org.