Ph: (517) 702-3305
IRA Legislation Offers Red Cross Donors
Giving Opportunity Before December 31, 2007
to new IRA legislation, getting older has its rewards
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.
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.
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
benefits from the IRA legislation?
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.
who usually donate up to 50% of their adjusted gross
(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.
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
which requires that itemized deductions be reduced
by 2% of adjusted gross income in excess of $150,000.
whose major assets reside in their IRAs
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.
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.