Fort Collins Symphony

The Pension Protection Act of 2006 signed into law on August 17, 2006 included the IRA Rollover Provision, a charitable giving incentive. Briefly and generally, it permits contributions to charities such as the Fort Collins Symphony Orchestra up to a $100,000 limit for the balance of 2006 and again for 2007 from a donor age 70½ or older directly from the donor’s IRA.

Following are key components of the provision as they affect gifts to the FCSO. However, it is important to consult a tax advisor in your particular situation.

IRA gift/charitable rollover counts toward mandatory annual distributions required of individuals 70½ and older, will not be included in the taxpayer’s gross income, and will not be deductible as a charitable contribution.
The donor/taxpayer must be age 70½ on or before the date of the gift.
The gift/charitable rollover must be made directly from the IRA custodial institution to the Symphony, not passed through the donor.
The gift must be sent to a qualified charity; "The Fort Collins Symphony Orchestra" is the legal entity to which such a gift must be made.
Gifts made to the Symphony’s Endowment Trust or to fund a charitable trust do not qualify under this provision. However, it is permissible to pay a pledge with an IRA charitable rollover as long as the check is payable as noted above. Distributions to donor-advised funds held by public charities are not qualified charitable distributions for these purposes.
The provision applies only to traditional and Roth IRAs, not to 401(k)s, 403(b)s, SEPs or annuities.
The contribution limit is $100,000 for tax year 2006 and $100,000 for 2007 per taxpayer. A married couple, each with an IRA account, could have rollover contributions totaling as much as $200,000 each tax year.

Example: Taxpayer A has a traditional IRA with a balance of $100,000. The entire IRA balance is distributed directly to a group of qualified charities including the FCSO. Under the former law, the entire distribution of $100,000 would be includible in Taxpayer A’s gross income for tax purposes. Under the present provision, the entire distribution is a qualified charitable distribution and none of the distribution is included in the taxpayer's income.

Who is most likely to benefit from this provision?

Generous Symphony donors who have already contributed more than they can deduct because of percentage limitations but wish to make additional gifts or pay pledges.
Patrons who have made the FCSO a beneficiary of IRA assets through estate planning but wish to make a gift in their lifetime.
Patrons who lose some of their itemized deductions because of their income level, or are required to take distributions but do not need them for living expenses.
Non-itemizers

You’ve talked with your tax advisor and you want to make a gift from your IRA. What now?

First, inform the custodian of your IRA account of what you wish to do. Follow the custodian’s procedures for making the gift.
In order to accept and acknowledge a gift as coming from an IRA, the FCSO must receive the gift directly from the IRA custodian payable to the Fort Collins Symphony Orchestra; we need the name of the donor, the allocation of the gift (e.g. annual fund, payment of a pledge, etc.) and a statement that the gift came from a traditional IRA account.
As an added precaution, please relay this same information to the Symphony, to the attention of:
Finance Manager
Fort Collins Symphony Orchestra
P.O. Box 1963
Fort Collins, CO 80522-1963

For questions please call 970-482-4823 or e-mail note@fcsymphony.org

This is not to be considered legal, tax, or other professional advice. It is important to consult your tax advisor regarding your individual situation.