Frank Rasmus with Philadelphia Orchestra violinist Daniel Han at the February Wister Society Reception

> Loyal Philadelphia Orchestra Supporter, Frank Rasmus, speaks about philanthropy in The Philadelphia Inquirer

IRA Rollover Legislation Gives Donors an Increased Opportunity to Give to Charity for a Limited Time

On August 17, 2006, President Bush signed the Pension Protection Act of 2006 (PPA of 2006) into law, which gives donors an opportunity to make direct gifts to charity during their lifetime from their IRAs without any income tax consequences. Certain donors can now give up to $100,000 per year of their IRA to charity and exclude the distribution from income.

Donors must be at least age 70½ on the date of gift to charity, and the gift must be to a public charity and not to a donor advised fund, a private foundation, or a supporting organization. The new rule applies only for tax years 2006 and 2007. The gift cannot be a split gift such as a charitable gift annuity or a charitable trust. In addition, the rule only applies to traditional IRAs and Roth IRAs, and not to 401(k) plans or other types of deferred compensation plans.

Since the IRA Rollover is framed as an exclusion from income, the ability to give to charity up to $100,000 per taxpayer per year in this way (that is, by direct distribution from an IRA account to charity) comes on top of the usual percentage limitations for charitable income tax deductions (30% of adjusted gross income for contributions of appreciated property, 50% of AGI for contributions of cash), so this increases the total amount that motivated donors can give to charity during this year and next. A donor couple can give up to $200,000 by IRA Rollover if each spouse has at least $100,000 in his or her IRA and meets the age requirement.

Distributions from an IRA to charity will be treated as a distribution to the individual IRA owner for purposes of the minimum required distribution requirements that apply to taxpayers over age 70½.

For more information on giving under this new law, please contact Ned Donoghue, director of planned giving at The Philadelphia Orchestra: 215.893.3146 or ndonoghue@philorch.org

> IRA Rollover Guidelines

> IRA Direction Letter to Custodian