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Charitable IRA Rollover: A Unique Giving Opportunity

If you are age 70 ½ or older, new legislation-H.R. 4, the Pension Protection Act of 2006-allows you to make cash gifts through a "qualified charitable distribution" or "charitable IRA rollover" totaling up to $100,000 a year from your traditional or Roth IRA to Kenyon College without incurring income tax on the withdrawal. The provision is effective for tax years 2006 and 2007 only, so you must act by December 31 to take full advantage.
  • Anyone with a traditional or Roth Individual Retirement Account (IRA) who is age 70 ½ or older can make a gift through a charitable IRA rollover.
  • You can donate up to $100,000 annually in tax years 2006 and 2007, no matter what your income is.
  • You are required to take a minimum required distribution (MRD) if you make a gift from a traditional IRA, but you can use your donation to meet all or part of this requirement.
  • You do not get a federal income tax deducation, but you are not required to pay federal income tax on the withdrawal either.
    NOTE: Some states may not exclude gift amounts withdrawn from an IRA for state income tax purposes. Consult with your tax adviser.
  • Gifts from retirement accounts other than IRAs-such as 401(k), 403(b) and SEP accounts-are not eligible to make direct transfers. However, donors may be able to make qualified, tax-free transfers to their IRA, and then make a charitable rollover gift from their IRA. Consult with your tax adviser.

To Make a Gift to Kenyon through a Qualified IRA Distribution:

  • Contact your retirement plan trustee well before the December 31 deadline to learn how to initiate the transfer. All qualified distributions must be made directly to Kenyon by the plan trustee.
  • Instruct trustee to make a "qualified charitable distribution" or "charitable IRA rollover" and to transfer a specific amount directly to Kenyon College.
  • Instructions for trustee to complete the distribution by check or by direct cash wire are available through the College. In all cases, distribution should be made directly to Kenyon College with your name included on the check or wiring instructions. The check or distribution proceeds should not come to you.

Contact Sindy Craig or Sarah Kahrl at (800) KENYON-C (800-536-9662) with any questions or for assistance with this giving option.