Pension Protection Act Creates New Opportunity for Giving to PTS

Princeton, NJ, August 24, 2006–On August 4, 2006, Congress passed the Pension Protection Act of 2006, which makes it possible, for the first time, for donors to make tax-efficient charitable gifts from IRAs and Roth IRAs during their lifetimes.  In the past, donors who are at least 70-1/2 years old who made gifts from their retirement accounts withdrew funds and included those amounts in their gross income.  Now for a limited period of time, owners of IRAs who are already required to take distributions from their retirement accounts can transfer up to $100,000 to a qualified tax-exempt public charity.  This contribution does not create a charitable deduction, but it does allow the donor to exclude the IRA distribution from gross income.

There are some restrictions on this “charitable rollover”:

• The donor must be at least 70-½ years old
• The contribution must be made from the IRA trustee directly to the charity.
• Contributions can only be made to public charities, and not to private foundations, supporting organizations, or donor-advised funds.
• This IRA charitable rollover provision expires December 31, 2007.

If you are already required to take distributions from your IRA, have a small IRA you no longer need, or wish to reduce your minimum required distributions and thus reduce your taxable income, a charitable rollover from your IRA may be a convenient way to make a substantial gift to charity.  If you would like to know more about this opportunity to give to Princeton Theological Seminary, contact Rosemary Mitchell, Vice President for Seminary Relations, at 609.497.7750 or by email at rosemary.mitchell@ptsem.edu.