Washington, DC - Bipartisan legislation introduced this week would expand the IRA Charitable Rollover to allow seniors starting at age 65 to make tax-free IRA rollovers to charities through life-income plans (charitable gift annuities or charitable remainder trusts).
The existing IRA Charitable Rollover, first created by Congress in 2006, allows individuals to make direct tax-free charitable gifts of up to $100,000 from their traditional IRA starting at age 70 ½. The Legacy IRA Act, sponsored by Sens. Kevin Cramer (R-N.D.) and Debbie Stabenow (D-MI), would expand the IRA Charitable Rollover by enabling seniors age 65 and over to give up to $400,000 tax free to an annuity held by the charity of their choice. Distributions from the charitable annuity to the donor would be taxed, just as distributions from a traditional IRA.
American Heart Association Chief Operating Officer Suzie Upton issued the following statement about the bill:
“This legislation is a win-win, both for seniors who want to support philanthropic causes and for charitable organizations that benefit from individual philanthropy. By building on the IRA Charitable Rollover, which has generated millions of dollars in new or increased contributions to local and national charities, this bill would allow more seniors to benefit from the rollover and make tax-free charitable contributions.
“The legislation would encourage charitable giving to mission-driven organizations nationwide, enabling seniors to participate in the rich American tradition of philanthropy while continuing to draw needed income from their investments. We are grateful to Senators Cramer and Stabenow for their leadership on behalf of the nationwide philanthropic community, and we urge broad congressional support for this important bill.”