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In the News


FOR IMMEDIATE RELEASE                                                        Contact: Robert Hartley

February 28, 2007                                                                          Ph: (517) 702-3305        


New IRA Legislation Offers Red Cross Donors

Golden Giving Opportunity Before December 31, 2007

Thanks to new IRA legislation, getting older has its rewards


Aches and pains and creaking joints not withstanding, getting older has its rewards. Consider the newly enacted Pension Protection Act of 2006. It allows donors to make charitable gifts from their IRAs without being subject to any taxes but it only works for those over age 70½. After age 70½, individuals must begin withdrawing and paying income tax on a certain amount every year from their IRA regardless of whether or not needed. Anything in an IRA passed on to heirs will also be subject to income tax. Although donors may avoid or minimize tax by making a charitable gift of all or a portion of an IRA when they die, they are unable to give IRA assets to a charity during their lifetime without running into substantial tax obstacles until now.


If the requirements of the Act are met, a donor can give up to $100,000 from their IRA and the amount of the gift will be entirely excluded from the donor's taxable income. As a result, the gift will not be subject to the charitable contribution deduction limit (i.e., the troublesome 50% of AGI limit). Similarly, even donors who take a standard deduction will be able to benefit since they will completely avoid the income tax otherwise payable on the IRA distribution. And, perhaps the best news of all, the gift will qualify towards the satisfaction of the donor's annual required minimum distribution from the IRA.


Arranging to make a gift from your IRA is easy. Unfortunately, the opportunity ends December 31, 2007 unless the Act is extended by further legislation. If you would like more information or to discuss IRA giving opportunities, please call Bob Hartley at 517-702-3305 or email him at


Who benefits from the IRA legislation?


  • Donors who are required to take required minimum distributions but don't need the additional income can satisfy the distribution requirement with a gift to the Red Cross. 
  • Donors who usually donate up to 50% of their adjusted gross income (the limit on the allowable charitable deduction for any year) can now give up to $100,000 from their IRA without being subject to this limit or any taxation on the distribution. This could enable donors to avoid up to $35,000 ($100,000 x 35%) in federal income tax on IRA distributions for this year. 
  • Donors who do not itemize and 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 an IRA gift to charity.
  • Donors who are subject to the troublesome 2% rule, which requires that itemized deductions be reduced by 2% of adjusted gross income in excess of $150,000. 
  • Donors whose major assets reside in their IRAs will find it convenient this year to make direct transfers to charity from their IRAs without the hassle of having to report the transfer on their income tax returns.

The American Red Cross helps people prevent, prepare for and respond to emergencies. Last year, almost a million volunteers and 35,000 employees helped victims of almost 75,000 disasters; taught lifesaving skills to millions; and helped U.S. service members separated from their families stay connected. Almost four million people gave blood through the Red Cross, the largest U.S. supplier of blood and blood products. The American Red Cross is part of the International Red Cross and Red Crescent Movement. An average of 91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs. The Red Cross is not a government agency; it relies on donations of time, money, and blood to do its work.







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