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Special Notice about New IRA Rollover Provision for Gifts to Cooper Union

To encourage broader giving to charitable organizations, Congress passed the Pension Protection Act of 2006, which was signed into law on August 17, 2006. The new law permits individuals who are age 70½ and older to rollover up to $100,000 per year from an IRA directly to a charity through December 31, 2007.

The new IRA rollover option may provide you with the opportunity to support Cooper Union and other public charities with gifts from your IRA assets, while avoiding the normal tax on IRA withdrawals.

Since you must follow specific rules in order to benefit from this rollover option, you should contact you own tax advisors to learn how the rules may affect your particular tax situation. Here's more about how the new law works:

  • You must be 70½ years of age or older.
  • Your IRA rollover gifts must be made outright to qualified charities from a traditional IRA or a Roth IRA.
  • The transfer must go directly from your IRA to qualified charities-gifts to donor advised funds, private foundations, and supporting organizations are not eligible.
  • Your IRA rollover gifts cannot exceed $100,000 per year.
  • The amount rolled over from your IRA will be excluded from your gross income.
  • Your IRA rollover will count toward your minimum distribution requirement.
  • There is no federal income tax deduction for the IRA rollover gift.
  • The IRA rollover provision is effective only through December 31, 2007.

Note: Prior to the new law, a donor had to report a withdrawal from an IRA as income, and then declare an offsetting income tax deduction for the charitable contribution. Due to a variety of tax rules, including deduction limitations and phase-outs, the net effect of increasing income and then declaring a deduction was an increase in taxes for many potential donors.

The new tax-free IRA rollover option may be especially attractive to:

  • Donors who do not itemize their deductions
  • Donors required to take minimum withdrawals from their IRAs but don't need that income currently
  • Donors whose income level causes the phase-out of their exemptions
  • Donors already giving at their 50 percent deduction limit
  • Donors for whom additional income will cause more of their Social Security income to be taxed.

The Cooper Union thanks Ellen G. Estes, LL.B. and PG Calc, Inc., our partners in Planned Giving. For more details of how this may help you plan more generous support for the college, please also visit: Congress Passes IRA Rollover.

You can also call Michael Governor, Cooper Union's assistant director of major gifts, at 212.353.4172 or email him at govern@cooper.edu.

Thank you for your support!