IRA rollover to supporting organization

IRA rollover to supporting organization

Forum topic posted in Forum, U.S. Tax Court on 28 December 2010| 8 comments
audience: | last updated: 28 December 2010
9 posts / 0 new
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Joined: 09/09/2010
Points: 45
Can an IRA owner make a non-taxable distribution to an unrestricted fund in a supporting organization at a community foundation? Susan Baran

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W Earl Taylor's picture
Joined: 04/05/2001
Points: 30
IRA rollover to SO
Can an IRA owner make a non-taxable distribution to an unrestricted fund in a supporting organization at a community foundation? Susan Baran Unfortunately, no...but can make distribution to the supported creative can you be?
Joined: 09/09/2010
Points: 45
IRA Roller to SO
Would it make a difference if the distribution went to a restricted fund at the supporting organization? This would remove any question of donor control.
Joined: 06/08/2006
Points: 30
Unfortunately, No
Charitable rollovers cannot be made to 501(c)(3) charities that are further classified as 509(a)(3) supporting orgs.
csangster's picture
Joined: 10/05/2000
Points: 229
The IRA rollover (that has
The IRA rollover (that has been extended by the 2010 Tax Relief bill for 2010, and 2011) does not include rollovers to 509(a)(3) supporting organizations or donor advised funds. See 408(d)(8)(A). The rollover is limited to organizations in Sec. 170(b)(1)(A), private foundations are also excluded, with the exception of the conduit private foundation. The rollover is not included in income but the donor does not receive an income tax deduction either. Your facts indicate that the distribution is non-taxable, however, so it seems to me that you are not precluded from making a gift to a supporting organization at a community foundation. It will be deemed received by the IRA owner and then transferred to the charitable organization -- it just isn't taxable to the IRA owner from what you have indicated (this is a return of principal?) This would simply be a simple contribution from IRA donor to charity. And, you should be able to get a deduction for the contribution as well. If the distribution were taxable (as part of the required minimum distribution for the IRA donor) then you would not be able to do the rollever to the supporting organization or donor advised fund (see first paragraph above). Hope this is helpful.
Joined: 11/07/2008
Points: 15
IRA rollover to SO's
As I understand it, it depends on what kind of supporting organization you are, and whether you meet the "public support" test.
Joined: 11/04/1998
Points: 15
IRA Rollover to supporting organization
Nope. Support organizations are specifically prohibited, as are donor advised funds. We ask donors to give directly to the 501c3 organization our foundation supports.
Joined: 08/13/2008
Points: 15
Susan, My interpretation is
Susan, My interpretation is that a supporting organization would not be eligible. Charities must fall under IRS code section 170(b) to be eligible. Donor advised funds, charitable remainder trusts and private foundations are ineligible.
Joined: 10/31/2006
Points: 15
IRA Distribution to a Supporting Organization
IRA tax-free distributions cannot go to supporting organizations. The rules are all the same as they were in the past except 2010 distributions may be made through 1/31/11.
7520 Rates: June 3.4% May 3.2% April 3.2%

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