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Gift and Estate Planning

Making IRA Transfers to UT Austin a Win-Win

Retirement is a time to take stock of the legacy you will leave. One way to ensure that what you've built over your lifetime lives on is by supporting a place that makes a difference every day - The University of Texas at Austin. And one of the easiest ways to do that is with an IRA charitable gift.

If you are 70½ or older, you are required to distribute funds annually from your Individual Retirement Account (IRA). This mandatory distribution often creates a tax burden. But federal law* allows you to make direct, annual transfers of up to $100,000 from an IRA to charity without treating the distribution as taxable income. These "charitable transfers" can significantly lower your taxable income, and a direct transfer to UT Austin from your IRA counts toward your minimum required distribution.

An IRA charitable gift can benefit retirees, who often have paid off their mortgages and don't file itemized returns. The gift may help to neutralize the negative tax consequences of a minimum required distribution.

How important are IRA charitable gifts to UT? To date, alumni and friends have provided more than $17 million from their IRAs to support faculty and students working together to solve society's biggest challenges. These gifts have transformed UT Austin, and you can designate your IRA gift to the UT people and programs you care about most. Give to a good cause and gain an income tax advantage.

*Established under the Pension Protection Act

More About the IRA Charitable Transfer

Congress has permanently extended the opportunity for Americans to make direct transfers from their Individual Retirement Accounts (IRAs) to public charities for 2015 and beyond. While individuals may begin taking distributions from their IRAs as early as age 59½, they are required to begin taking them at age 70½. The mandatory distribution often creates a tax burden, even if the individual donates the money to charity. The IRA charitable transfer provision, established under the Pension Protection Act, allows those at least 70½ to donate up to $100,000 to charitable organizations directly from their IRA, without treating the distribution as taxable income.

This has the ability to help senior citizens who have often paid off their mortgage and therefore no longer file itemized returns. The provision neutralizes negative tax consequences and encourages charitable giving during one’s lifetime.

  • Eligibility Age. Taxpayers age 70½ and older are required to make annual distributions from their IRAs which are then included in the taxpayers’ adjusted gross income (AGI) and subject to taxes. The IRA charitable transfer permits those taxpayers to make donations directly to charitable organizations from their IRAs without counting them as part of their AGI and, consequently, without paying taxes on them. No charitable tax deduction is allowed because these IRA transfers involve assets that have never been taxed.
  • Annual Cap. A donor’s total combined charitable IRA contributions cannot exceed $100,000 in any one year.
  • Eligible Charities. Charitable contributions from an IRA must go directly to a public charity that is not a supporting organization. Contributions to donor-advised funds and private foundations, except in narrow circumstances, do not qualify for tax-free IRA contributions. Transfers to charitable gift annuities or charitable remainder trusts do not qualify either because the donor receives a benefit.
  • Eligible Retirement Accounts. Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible for the tax-free treatment.
  • Directly to the Charity. Distributions must be made directly from the IRA trustee payable to the public charity.
  • No Gifts in Return. Donors cannot receive any goods or services in return for charitable IRA transfer contributions in order to qualify for tax-free treatment. The gift cannot be used to pay memberships or to retain or obtain preferred seating for athletic events.
  • Written Receipt. In order to benefit from the tax-free treatment, donors must obtain written substantiation of each IRA transfer from each recipient charity. UT Austin will provide a receipt.

Helpful Forms

IRA Charitable Transfer Instructions

Sample Letter to Plan Administrator

  1. Contact the Gift and Estate Planning Team at 512-475-9632, toll-free: 800-687-4602, or giftplan@austin.utexas.edu to discuss the possibility of making an IRA charitable transfer.
  2. Seek the advice of your financial or legal advisor to make sure this gift fits your goals.
  3. If you include the university in your plans, please use our legal name and Federal Tax ID:

Legal Name: Board of Regents of The University of Texas System for the benefit of The University of Texas at Austin
Address: P.O. Box 7458 Austin, TX 78713
Federal Tax I.D. No: 30-0710145

To qualify for the IRA charitable transfer, the gift:

  1. Must come directly from your IRA administrator
  2. Should be made payable to The University of Texas at Austin. Click here for printable instructions.
  3. Should be mailed to:

    University Development Office
    Gift and Estate Planning Team
    P.O. Box 7458
    Austin, TX 78713-7458

IRS Circular 230 Notice: The University of Texas at Austin does not provide legal, tax, or financial advice. Consequently, we urge you to seek the advice of your own legal, tax, or financial professionals in connection with gift and planning matters. This information is not intended to be used and cannot be used for the purpose of avoiding tax-related penalties.

A charitable bequest is one or two sentences in your will or living trust that leave to The University of Texas at Austin a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to The University of Texas at Austin, a nonprofit corporation currently located at P.O. Box 7458 Austin, TX 78713 , or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the university or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the university as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the university as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the university where you agree to make a gift to the university and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

Personal Estate Planning Kit Request Form

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