IRA Rollover Provision Reinstated Through 2009
(Oct. 3, 2008) President Bush has signed into law the $700 billion economic bailout bill (H.R. 1424, Financial Rescue Package), which includes a two-year extension of the IRA Rollover provision as well as other charitable giving provisions.
The provision will be made retroactive to Jan. 1, 2008, and will apply to gifts made from that date through Dec. 31, 2009.
The provision exempts from taxable income any funds transferred (“rolled over”) from an Individual Retirement Account (IRA) to a charitable organization. The following limitations apply:
- The donor must be age 70½ or older.
- The cap on annual IRA rollovers is $100,000.
- The contribution must be a direct gift to a charity (no planned gifts).
The provision expired at the end of 2007, and one of AFP’s chief legislative goals has been to reinstate the provision and make it permanent.
“This is a huge victory for the fundraising community,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “A critical part of this success has been all of the letters, phone calls and emails that AFP members have sent to Congress and the White House. I thank every member who got involved over the past year. Your work has paid off!”
AFP will continue to push for changes to the rollover provision in 2009, including lowering the age for donors, increasing the cap on gifts and making the provision permanent.
Other Giving Incentives
The bill also contains several other provisions related to charitable giving, including two specifically focusing on disaster relief efforts in the Midwest. Individuals and businesses located in presidentially declared disaster areas due to floods, tornados and severe storms in Iowa, Arkansas, Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska and Wisconsin would be eligible for these provisions
People who use their vehicles for disaster relief can deduct 41 cents per mile — or about 70 percent of the current business mileage rate through the end of 2009. The rates now are 14 cents per mile for charitable activities and 58.5 cents for business activities. Volunteers can also exclude from their income reimbursements from charities for use of their vehicles up to the amount of the standard business rate through the end of 2009.
In addition, the following provisions were reinstated and extended through 2009:
- Extension of enhanced charitable deduction for contributions of food inventory
- Enhanced charitable deduction for contributions of book inventories to public schools
- Extension of enhanced deduction for corporate contributions of computer equipment for educational purposes
Related AFP ResourcesAFP Offers Tax Incentive Recommendations to Finance Committee
AFP Political Action Committee Fact Sheet and Q&A
IRA Rollover Provision Introduced by Key Senators
AFP Urges Congress to Include IRA Rollover in Stimulus Package
AFP Calls on Parliament to Eliminate Capital Gains Tax on Gifts of Securities