TaxfreeIRS
TAX FREE IRA ROLLOVER GIFTS NOW AVAILABLE!
The Pension Protection Act of 2006 (H.R.4) is now law. But it also includes a modified version of the CARE Act – the long-promised legislation that allows donors to consider tax free gifts from IRAs to Scouting and other charities.
Effective immediately, you may now withdraw money from an IRA – tax free – and use those funds to make your charitable gifts! Whether you’re considering a one time gift to a spacivic event or fund or a large gift to capital or endowment, the new law offers some great gift opportunities.
Here are some specifics:
You are limited to a total of $100,000 per year, per person, and distributions can be made from more than one IRA. So, a couple with separate IRAs can give a total of $200,000/year.
Tax free gifts must be made from traditional IRAs or Roth IRAs – not from pension plans, stock option plans, etc.
· A donor must be age 70 ½ or older at the time the gift is made.
- IRA withdrawals and gifts should go directly to the local council or charity from the IRA Plan Administrator.
- The IRA distribution to charity is not included in your income, but you will not receive a tax deduction for the gift.
- Rollover gifts to charity will count towards the IRA’s annual Minimum Required Distribution requirements.
- Rollover gifts must be outright gifts to charity – you may not use them to create a gift annuity, charitable remainder trust, or other deferred gift.
· Tax free IRA rollover gifts can only be made in 2006 and 2007.
Who will most benefit from the new tax-free IRA rollover gifts? In general, these gifts are best for donors who:
- Do not itemize their deductions (about 75% of all taxpayers).
- Have “maxed out” their deductions for the year (you can contribute and deduct more than your normal 50% AGI limitation).
- Want to reduce their taxable income and also make generous gifts (IRA gifts aren’t subject to reductions or “phase-outs”, and may also reduce tax on other income such as Social Security).
- Live in a state that doesn’t credit you for itemized deductions on your state income taxes.
You may choose to make an IRA rollover gift, just because it’s easy! Ask your IRA Plan Administrator to withdraw the amount of your gift and distribute it directly to your BSA local council or other charities. Make sure he or she has a current address and/or bank transfer instructions for the BSA council or charity. Also, give your Plan Administrator enough time to complete the transfer before year end. But it’s that simple.
You should discuss these gifts with your own family and advisors. IRA assets left in an estate are potentially hit with double taxation – both estate AND income taxes. Your IRA assets may be your most costly estate assets to pass on to heirs. So talk to your family and financial advisors. They’ll help you decide if IRA rollover gifts will meet your financial needs and objectives.
Thank you for your continuing patriotice prjects and event. Talk to your advisors about these new gifts, and please call the council for more information about what your gifts can do for a Better America, One Community at a Time.
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The purpose of this memo is to provide general educational information about charitable gifts and financial planning. It is not intended as legal, accounting, or other professional advice. Assistance with these matters should be obtained from appropriate advisors. |
Colonial Flag Foundation
http://colonialflagfoundation.org/staticpages/index.php/20061218234626569