Carolina Development, UNC-Chapel Hill

Office of Gift Planning

Charitable IRA Rollover provision extended through tax year 2009

What is it?

Old Well On October 3, 2008, President Bush signed into law the Emergency Economic Stabilization Act of 2008. While the main feature of the Act is the rescue/bailout package, it also extends certain portions of the Pension Protection Act of 2006 that expired on December 31, 2007. The centerpiece of the legislation from a gift planning perspective is the IRA Rollover provision. This provision allows individuals to make distributions from their IRA accounts directly to a charity without recognizing the distribution as income. The extension covers distributions made in tax years 2008 and 2009. Key points of the provision are:

You must be at least 70 ½ at the time of the charitable distribution.
You may distribute up to $100,000 per year, for tax years 2008 and 2009.
Distributions must be made directly from the trustee/administrator of your IRA to a qualifying public charity (you cannot receive the distribution prior to gifting to the charity).
Distributions cannot be made to donor advised funds or "supporting organizations." Careful planning is required because many foundations are classified as supporting organizations. A list of the University’s qualified affiliated foundations can be found below.
Gifts must be made outright to the charity (they cannot be used to fund charitable remainder trusts or charitable gift annuities).
No charitable deduction is allowed, since this provision allows you to exclude the distribution from income.

Who might benefit?

Individuals who have accumulated IRA assets that may not be needed to support their retirement lifestyle, but are required to take distributions each year. A qualified charitable distribution can partially or completely satisfy annual minimum distribution requirements, without having to recognize the distribution as income.
Individuals who have made, or are contemplating making, charitable gifts that exceed 50% of their adjusted gross income (the maximum amount of deduction allowed for cash gifts). A qualified charitable distribution is not subject to the 50% AGI (Adjusted Gross Income) limitation because no charitable deduction is permitted.
Individuals who own an assortment of smaller IRA accounts that while not substantial in relation to financial needs, nevertheless require owners to keep up with minimum distribution requirements each year. These smaller accounts can be given in their entirety (provided the total amount for all accounts does not exceed $100,000) as a qualified charitable distribution.
Individuals who do not itemize deductions on their federal income tax returns. Many prefer claiming the standard deduction and filing a less complicated return. Making a qualified charitable distribution will not require individuals to itemize, so there will be no need to change their tax preparation preferences.

Did you know?

Retirement plan accounts are one of the most highly taxed assets that a person can give to their heirs at death –sometimes taxed as much as 70% . Consequently, these accounts are one of the most inefficient assets to pass to family and loved ones, but they are one of the most tax-efficient assets to give to UNC to fund your Carolina legacy. Not only could you benefit from making an outright distribution now from your IRA, by naming Carolina as the beneficiary of your retirement account, you could also avoid excessive taxation of this asset at your death.

How do you make a gift?

Contact your plan administrator to request a distribution from your IRA account to the University under the Charitable Rollover provision. For your convenience, we have provided sample letters that you can use to make the request to your plan administrator and to let us know of your intentions. It is important that you alert us to the distribution so that we can monitor its receipt and provide you with the proper acknowledgement required by the IRS for charitable IRA Rollover distributions.

Distributions can be made for the benefit of the University through any of the following entities. We recommend that if you wish to split your distribution among several areas of the University, you direct your plan administrator to make your check payable to The University of North Carolina at Chapel Hill Foundation, Inc., and then let us know how the gift should be divided.

IRA Rollover distributions can be directed to the following:

Entity	Tax ID No.	For the benefit of...
The University of North Carolina at Chapel Hill	56-6001393	any UNC school, unit or department
The University of North Carolina at Chapel Hill Foundation, Inc.	59-1711424	any UNC school, unit, department or affiliated foundation
The University of North Carolina at Chapel Hill Arts and Sciences Foundation, Inc.	56-1150509	College of Arts and Sciences
The Botanical Garden Foundation, Inc.	56-6076622	North Carolina Botanical Garden
The Kenan-Flagler Business School Foundation, Inc.	56-0771850	Kenan-Flagler Business School
The Dental Foundation of North Carolina, Inc.	56-6304130	School of Dentistry
The University of North Carolina at Chapel Hill School of Education Foundation, Inc.	58-1713621	School of Education
The Educational Foundation, Inc.	56-6058412	Rams Club
The School of Government Foundation, Inc.	56-1966429	School of Government
The School of Journalism and Mass Communication Foundation of North Carolina, Inc.	56-6034739	School of Journalism and Mass Communication
The Medical Foundation of North Carolina, Inc.	56-6057494	School of Medicine
The Morehead-Cain Scholarship Foundation	56-2462593	Morehead-Cain Scholarship Program
The University of North Carolina at Chapel Hill School of Nursing Foundation, Inc.	58-1508175	School of Nursing
The Pharmacy Foundation of North Carolina, Inc.	56-6037918	School of Pharmacy
The University of North Carolina at Chapel Hill School of Public Health Foundation, Inc.	56-1717285	School of Public Health
The School of Social Work Foundation, Inc.	58-1623883	School of Social Work

Gifts to benefit the School of Law should be directed to The University of North Carolina at Chapel Hill Foundation, Inc.

Your plan administrator should mail your distribution to the following address:

The University of North Carolina at Chapel Hill
Office of Gift Planning
Post Office Box 309
Chapel Hill, North Carolina 27514-0309

Contact us/more information

We urge you to consult your professional advisors regarding this charitable IRA rollover opportunity. To help insure that your gift meets all requirements as a qualified charitable distribution, please contact a member of the Office of Gift Planning staff. The staff can also assist you with any questions regarding making Carolina a beneficiary of your retirement plan. For additional information on gifts of retirement plan assets, click here.

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