Tax-Free IRA Rollover Permanently Extended
On Friday, December 18, 2015, Congress passed the IRA charitable rollover provision of the Trade Facilitation and Trade Enforcement Act of 2015, which included permanent reinstatement of the IRA charitable rollover opportunity.
Under this legislation, qualified donors may make outright gifts of up to $100,000 per year to Harvard from their IRA and avoid taxation on the distribution. For gifts to be counted toward the required minimum distribution (RMD) for 2016, transfers must be made by December 31, 2016.
To benefit from this gift opportunity, the following qualifications must be met:
- Donor must be age 70 ½ or older at the time of transfer.
- The maximum amount a donor may transfer is $100,000.
- The gift must be outright. Gifts to donor advised funds or to life income vehicles do not qualify.
- The gift must be transferred directly from the IRA account by the IRA administrator to Harvard. Donors with check-writing ability for their IRAs may use this feature to complete their gift.
To assist donors interested in making a charitable gift from their IRA, we have provided the following sample letters:
- Sample Request from Plan Owner to IRA Administrator (PDF)
- Sample Letter from Donor Informing Harvard of IRA Transfer (PDF)
The first letter contains specific transfer instructions from the donor to the IRA custody agent.
The second letter is from the donor to Harvard to inform Harvard as to how the gift should be used. This letter is particularly important for donors interested in splitting their gift between multiple Schools or Harvard affiliates. It also ensures Harvard’s ability to provide appropriate class credit to alumni donors.
If you have any questions regarding the charitable IRA rollover or how to make a planned gift to Harvard, please contact [email protected].