The bill that resolved “fiscal cliff” negotiations between Congress and the White House included a number of favorable provisions for charitable giving.
The American Taxpayer Relief Act of 2012, passed by Congress in January, extends the popular IRA charitable rollover through 2013. First introduced in 2006, the on-again, off-again rule allows individuals over age 70 ½ to transfer up to $100,000 per year from an IRA account to an approved charitable organization, like the UNT Foundation, without having to recognize the transfer as taxable income.
So far four university donors have taken advantage of this latest extension of the charitable IRA rollover, resulting in more than $150,000 in gifts to the university.
For some time, Horace and Euline (’74) Brock had been planning to increase the amount of two of their endowed scholarships to bring them up to the $100,000 level. Endowed scholarships provide awards based on the annual interest earned from the fund’s principal. By increasing the principal amount, the payoff from each of the Brocks’ merit-based scholarships will be $4,000 a year to help students cover their educational expenses.
“When we received the notice from the university, we said now’s the time, especially since we could make the transfer in January and still have it count as a 2012 gift,” said Euline Brock.
Because the new tax law took effect in a new calendar year, Congress allowed for a short window of opportunity for donors to retroactively have their transfers apply to their 2012 taxes.
In addition to their merit scholarships, the Brocks support many other areas of campus life, including scholarships in the College of Music.
Another longtime UNT supporter who took advantage of the IRA charitable rollover is Nicholas Ricco (’61). He transferred funds from two IRAs to the UNT Foundation Inc. to increase the principal on a music scholarship established by his family foundation. He also doubled the amount of an ethics scholarship, the Nicholas D. and Anna Ricco Ethics Scholarship Fund, bringing it up to $100,000. Ricco said the transfer from his IRA administrators to the UNT Foundation went smoothly.
“The greatest aspect of this type of gift is that, since I avoid tax on the distribution, I can give 30 percent more to UNT,” said Ricco.
Rob Buchheit, UNT executive director of planned giving, said transfer of funds must be done directly from an IRA as an outright gift in order to qualify under the IRS rules.
“The transfer generates neither taxable income nor tax deductions, so you will receive the benefit even if you do not itemize your tax deductions,” said Buchheit.
The UNT gift planning office can answer questions about the IRA charitable rollover and provide easy-to-use tools such as sample letters to IRA administrators. Contact Roy Grisham at Roy.Grisham@unt.edu or 940.565.3686.