Alumni and Giving

New Charitable IRA Rollover

On October 3, 2008, President Bush signed the Emergency Economic Stabilization Act of 2008 into law. The EESA extends certain charitable gift provisions of the Pension Protection Act, including the charitable IRA rollover provision (a "qualified charitable distribution") through December 31, 2009. A few points to consider:

  1. The charitable IRA rollover is only available for gifts from an IRA and not from any other type of retirement plan (e.g. 401(k), 403(b), SEP, Keogh, ESOP, etc.). In some cases, a donor may transfer assets from another type of retirement account into an IRA in order to be able to make a tax-free IRA rollover to a charity.
  2. It is only available for years 2008 and 2009 - a relatively brief window of opportunity.
  3. It is only allowed for outright gifts to a qualified public charity like Duke University for which the donor receives no benefits. It is not allowed for a charitable remainder trust, lead trust, gift annuity, pooled income fund, donor advised fund, supporting organization, family foundation, etc.
  4. It is only allowed for donors who are at least 70 ½ years of age on the date of the gift.
  5. Charitable IRA rollovers are limited to no more than $100,000 in total during each year from the donor's IRA or IRAs.
  6. There is no income realized and no income tax deduction for the donor making a charitable IRA rollover (unless the rollover is made from documented taxable contributions). This is far more beneficial for most donors when compared to a taxable IRA distribution followed by a charitable deduction. The rollover also negates the I.R.C. section 68 partial phase out of itemized deductions, eliminates issues related to the carryover of existing charitable deductions, results in no self employment or Social Security taxes and, in most cases, no state income tax is applicable to the rollover.
  7. The charitable IRA rollover should be directly transferred from the plan administrator (a.k.a. custodian or trustee) of the IRA to the charity. The donor should not accept any distribution of funds intended for a charitable IRA rollover. It may be advisable to direct the rollover well before year end to allow for unexpected delays.
  8. The charitable IRA rollover can count toward the donor's required IRA distribution for the year of the gift.
  9. A testamentary gift of an IRA to Duke may be more appropriate for donors who do not have sufficient assets to comfortably consider a lifetime charitable IRA rollover. This can be done by naming Duke as a primary or contingent beneficiary of the IRA.

For questions or to notify Duke about a charitable IRA rollover and gift use, please contact:

Katharine (Kate) B. Buchanan, J.D. (T '92)
Assistant Dean for Alumni & Development
Duke Law School
Science Drive & Towerview Road
Box 90389
Durham, North Carolina 27708-0389
Telephone: (919) 613-7217 or 1 (888) LAW-ALUM
Fax: (919) 613-7170
Email: buchanan@law.duke.edu