IRA Gifts Under the
Pension Protection Act

Good News from Washington
Charitable Treasure Buried in Massive Pension Legislation

It took nearly a decade, but Congress has finally enacted legislation as part of the Pension Protection Act of 2006 (PPA 2006), which offers charitably minded individuals a golden opportunity to make gifts from their IRAs and exclude the amount of their gifts from gross income. To qualify:


  • The donor must be 701/2 years of age or older
  • The transfers must go directly from the IRA to qualified charities
  • Gifts cannot exceed $100,000 per taxpayer per year
  • Gifts must be outright, not to donor advised funds, charitable remainder trusts, or for charitable gift annuities
  • And, remember, gifts of $100,000 may qualify for Florida's matching gift program

This opportunity is available only for 2006 and 2007, and no charitable income-tax deduction is allowed.

Individuals withdrawing $100,000 from their IRAs and contributing it to charity would have had to include the $100,000 in their income and would have been allowed a federal charitable income-tax deduction of up to $100,000 (subject to limits of deductibility) to offset the inclusion. Ostensibly, the net result was zero tax implication-a "wash" for all practical purposes. But for those taxpayers unable to use some or all of the charitable deduction, the new law presents a significant opportunity.

So, who benefits from the Pension Protection Act of 2006?

The new law presents a wonderful opportunity until the end of 2007 for individuals to utilize their IRAs creatively to accomplish special philanthropic objectives.


  • Individuals who are required to take minimum withdrawals but don't need additional income can satisfy up to $100,000 of the distribution requirement with a transfer to charity.
  • Individuals who usually give up to 50% of their adjusted gross income (AGI)-the ceiling on the allowable charitable deduction for any year-can now give up to $100,000 more from their IRA accounts, which is not subject to this limitation or taxed as a distribution. This could enable taxpayers to avoid up to $35,000 ($100,000 x 35%) in federal income tax on IRA distributions for this and next year.
  • Individuals who do not itemize and who make a charitable gift in an amount less than the standard deduction ($10,300 for married couples, $5,150 for single filers) will benefit from a transfer directly from their IRA to charity.

Please call if you have questions or if we can assist you in any way:

Planned Giving Officers:

George Cawthon
Dan Ott
Doug Medlin
Phone: (352) 392-5512
Toll-free: (866) 317-4143
Fax: (352) 392-8736
www.uff.ufl.edu

If you decide to make a gift under the Pension Protection Act, the first step will be to direct your IRA plan trustee/ administrator to make a distribution to the University of Florida Foundation. A form letter that may be used for that purpose is available online: PDF | MS Word.

You should also contact us and let us know that we will be receiving a gift. A form letter for that purpose is also online: PDF | MS Word.