|
In August 2006, President Bush signed into law the Pension Protection Act of 2006. Under one provision of the law, individuals who are 70 1/2 years old or older can now make direct transfers (or "rollovers") of Individual Retirement Account (IRA) assets to qualified charities without having to declare the transferred dollars as income.
The IRA Rollover, which allows taxpayers to donate up to $100,000 annually from their IRAs tax free to charitable causes, is widely considered to be one of the biggest charitable giving tax incentives to be created in years. Donors do not get a tax deduction for the gift, but the money is excluded from taxable income when computing taxes, so the effect is the same.
Previously, withdrawals from IRAs were subject to income taxes, which often significantly reduced the value of the gift to a charitable organization.
Particular highlights of the new provision:
- The provision applies only to individual donors who have reached age 70 1/2 by the time the charitable gift is made.
- The provision is effective only for tax years 2006 and 2007 and applies to gifts made in those two tax years. The rollover may be used to satisfy your IRA required minimum distributions in 2006 and 2007.
- The charitable rollover is limited to $100,000 each year; you can give up to $200,000 directly from an IRA to charity over the next two years.
- The provision only allows for direct, cash gifts to a qualified, nonprofit institution (i.e., the Hermann Park Conservancy or another 501(c)(3) charitable organization). Money cannot be directed to a donor-advised fund.
- The rollover amount will not be included in a donor ' s adjusted gross income (AGI), nor will a donor receive a deduction for the gift. Because the rollover does not affect a donor ' s AGI, it can be made in addition to any other charitable gifts the donor was intending or has already made.
- The provisions apply only to gifts from regular IRAs and Roth IRAs, not to gifts from other types of retirement plans.
The Hermann Park Conservancy welcomes transfers of IRA funds. Please contact us at 713-524-5876 for additional information or to make arrangements for a transfer.
This information should not be taken as legal or financial advice. Individuals contemplating tax implications of charitable giving should consult with their professional advisors.
For more information about making a planned gift to the Conservancy, including taking advantage of the 2006 IRA rollover provisions, contact Mona Fluitt at
713-524-5876 x 335 or mfluitt@hermannparkorg
CLICK
HERE TO DONATE ONLINE |
