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Charitable IRA Rollover Renewed

Roseville, Calif.- On December 19, 2014, President Obama signed H.R.5771 into law, which renews the Charitable IRA Rollover, making it easier for Americans to give to causes they care about.

This provision has the power to help local charities strengthen their communities by allowing individuals to roll over up to $100,000 from an Individual Retirement Account (IRA) to charity without being federally taxed. This extension expires December 31, 2014.


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In 2007, before he passed away, Harry Sands, long-time Auburn resident and owner of Chapel of the Hills Funeral Home, took advantage of the charitable rollover to donate $100,000 to Placer Community Foundation and create the Harry Sands Family Fund in memory of Anne Sands, Harry’s wife. Recently, a grant from the Sands’ fund helped to renovate the State Theater, which is a few blocks up the road from the funeral home on Lincoln Way in Auburn. “It’s amazing,” Harry’s son, Tim Sands, said at the time. “My father lived on Pine Street growing up and used to walk there to watch nickel movies. He would be very impressed by this project and I’m proud to honor his legacy through this gift.”

Millions of Americans continue to save pre-tax dollars in their IRAs. The rollover law allows taxpayers 70 1/2 and older to share their wealth by giving retirement savings directly to charity-and bypassing income tax.

This law is important to local charities operating as agents of philanthropy in order to continue to build community and improve social service programs that benefit people every day.

“It is a win-win-for people who would rather give to charity than pay taxes and for the nonprofit organizations they choose to support.”

Veronica Blake

Thanks to decades of deliberate saving, some of today’s retirees have more money in their IRAs than they need for daily living expenses and long-term care. Charitable individuals and couples have expressed an interest in giving the funds to charity, but income tax must be paid on all withdrawals, which reduces the value of the gift. Others are concerned about designating their children as IRA beneficiaries, since that may draw unintended tax consequences.

“For larger estates, a good portion of IRA wealth goes to estate taxes and income taxes of beneficiaries,” Blake said. “Experts estimate heirs may receive less than 50% of IRA assets that pass through estates.” A provision in the federal law extends this special option: transferring IRA assets directly to charity. By going directly to a qualified public charity such as Placer Community Foundation, the money is not included in the IRA owner’s income and-most important-is not taxed, preserving the full amount for charitable purposes.

About Placer Community Foundation

Placer Community Foundation grows local giving to strengthen our community by connecting donors who care with causes that matter. Known for sound financial management and knowledge of the nonprofit sector, the Community Foundation continually monitors the region to better understand the nature of local needs, so that it can invest in areas such as arts and culture, education, health and human services, and the environment. The Community Foundation provides regular trainings and technical assistance for the many local nonprofits that are experiencing growing public demand for programs and services. To learn more about establishing charitable funds, visit placercf.org