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IRA Rollover IRA Charitable Rollover

What is it?
Congress extended the IRA Charitable Rollover through December 31, 2009 enabling individuals age 70 ½ and over to transfer up to $100,000 per year from an Individual Retirement Account (IRA) to a qualified charity. This excellent gift technique was used by IRA owners in 2006, 2007 and 2008 to make gifts to the Federation totaling over $5 million dollars.

Am I eligible to make a tax-free transfer of my IRA?
If you have reached age 70 ½ by the date of your distribution and have an IRA, you can take advantage of this opportunity.

How long do I have to act?
The new rules are effective for transfers made only during the 2008 and 2009 tax years.

How much may I distribute?
Up to $100,000. In addition, your spouse may also distribute up to $100,000, if he or she also has an IRA with sufficient funds.

To whom may I make the distribution?
You may make a qualified charitable distribution (the term used in the law) from your IRA directly to the Federation or another public charity. However, the distribution may not be directed to a philanthropic fund (donor advised), supporting foundation, charitable remainder trust or charitable gift annuity.

What are the tax advantages of making distributions from my IRA?
In the past, a cash withdrawal from your IRA, whether you gave it to charity or not, would be taxed to you as ordinary income, regardless of a subsequent charitable contribution. Under this law, a distribution from your IRA is excluded from federal and Ohio income tax. Although the distribution is not eligible for an income tax charitable deduction, making a distribution from your IRA will not adversely affect the tax benefits of gifts you may make to charity from other sources. Please note that Required Minimum Distributions are not mandatory in 2009. However, such distributions continue to provide eligible donors with a convenient and tax efficient method of meeting charitable commitments

May I direct how my distribution will be used?
Yes. You can designate the distribution toward a specific use within the Federation, including:

  • Supporting the Annual Campaign; and/or
  • Establishing a special endowment fund to support a specific area of interest in the Jewish community; and/or
  • Creating a FOREVER Fund or a Lion of Judah Endowment to perpetuate your Annual Campaign gift; and/or
  • Investing in the future by supporting the Centennial Initiative

How do I make this distribution?
IIt is easy to accomplish. Simply instruct your IRA administrator in writing of your desire to distribute any amount, up to $100,000, from your IRA to the Federation. The Federation would be pleased to provide you with a sample letter you may use to direct this distribution. Download a sample letter.

For additional information contact Alan D. Gross of the Federation at 216.566.6698 or toll free 888.467.1125, ext. 219, or e-mail agross@jcfcleve.org. All inquires are confidential.

This material is presented for informative purposes only and should not be construed as legal, tax or financial advice. When considering gift planning strategies, you should always consult with your own legal and tax advisors.