IRA Rollover Gifts -A Special Gift Opportunity

The Pension Protection Act, which was recently signed into law, includes new rules for charitable gifts made from Individual Retirement Accounts. If you are over age 70 1/2, the Federal government now permits you to rollover amounts from your IRA to charity without incurring additional income tax or a penalty on the withdrawal. These tax-free rollover gifts could be $1,000, $10,000 or any amount up to $100,000 in one year.

The provision is effective for the 2006 and 2007 tax years only. To get the full tax benefit, donors must make charitable IRA rollovers before December 31, 2006, and again before the end of 2007. Here are several reasons why you might want to take advantage of this special opportunity to help Brophy.

Simple, Easy Gift -- If you are like many individuals, your IRA has increased in value over the years. You may be in a situation where the required minimum distribution is actually more income than you need. The IRA rollover gift is a simple and easy way to help a charitable organization, while not increasing your taxable income. Simply contact your IRA custodian and request that an amount be transferred to Brophy College Preparatory.

You Can Give More -- Perhaps you have already made cash gifts to charity this year up to the Federal limit (which is 50% of annual adjusted gross income). If you desire to give even more this year, with an IRA rollover gift you can transfer additional funds from your IRA to charity.

Make a Major Gift -- One of your goals may be to make a major gift to Brophy, and your IRA may be the largest asset in your estate. By making an IRA charitable rollover gift of up to $100,000 a year, you can help Brophy in a significant way and reduce your taxable income.

If you are considering taking advantage of this new legislation, there are a few other requirements you should be aware of. First, it applies only to traditional IRAs and Roth IRAs - and not to other retirement plans such as 401(k)s. The law requires that the rollovers be made directly by the IRA custodian to the qualified public charity. Therefore, it does not apply to distributions from an IRA to an individual, who then writes a personal check. Also, no charitable income tax deduction is allowed since no income is reported.

We advise you to talk with your financial or tax advisor to see if this would be appropriate for you. And we would greatly appreciate your sharing this information with family members who qualify and have an interest in helping Brophy continue its mission of educating Men for Others.