Unless legislation is enacted to change it, the Pension Protection Act’s provision that allows giving retirement plan assets as charitable donations will expire at the end of this calendar year. Remember to the raise the subject soon so you can advise your clients of the tax advantages of contributing IRA assets directly to charity. Key Points To Remember The Act’s key charitable giving incentive is what is often referred to as the "IRA Charitable Rollover." This provision provides that in certain circumstances, a taxpayer may exclude from gross income up to $100,000 of otherwise taxable distributions from an IRA 2007, as long as they are "qualified charitable distributions" and meet the following criteria: - They are made directly from the IRA trustee to one or more qualified charities.
- They are made when the taxpayer is age 70 ½ or older.
- They otherwise qualify for the full charitable contribution deduction (although because the amounts are not taken into income, no contribution deduction is permitted).
Also keep in mind that: - Split-interest vehicles such as charitable remainder trusts, supporting organizations and donor-advised funds are not permissible recipients.
- While no charitable contribution deduction is allowed for the distribution, the donor must nevertheless receive substantiation from the charitable organization.
The total of each year’s qualified distributions will count toward satisfying the taxpayer’s minimum distribution requirements for their IRA. This provision is effective as of August 17, 2006 and expires on December 31, 2007. For more information on how the Foundation can work with you and your clients, please visit: www.hfpg.org/givingadvice. |
