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Learn how to make Kosair Charities part of your planned giving.
IRA Giving
Are you 70 ½ or older? Make a tax-free contribution from your IRA... but only for the 2006 and 2007 tax year.
On August 17 President Bush signed into law the Pension Protection Act of 2006 (H.R. 4). The law contains an IRA rollover provision which allows donors age 70 ½ or older to exclude from gross income distributions to charity of up to $100,000 from traditional individual retirement accounts (IRAs) and Roth IRAs. The provision is in effect for tax years 2006 and 2007 only.
This is great news for tax-wise donors who wish to make an IRA contribution to Kosair Charities.
About the IRA Rollover
Among various other charitable incentives and reforms, H.R. 4 includes Individual Retirement Account (IRA) rollover provisions. As stipulated in H.R. 4, individuals who have reached the age of 70 ½ years will be able to donate up to $100,000 from a traditional IRA or a Roth IRA to a nonprofit entity without including the amount in gross taxable income. The IRA Rollover provisions in H.R. 4 are effective for contributions made during 2006 and 2007.
Traditional IRAs allow Americans to invest pre-tax income without incurring capital gains taxes. Withdrawals may be made penalty-free from the account following the individual's 60th birthday. Assets withdrawn from traditional IRAs are taxed as income. Due to the stock market boom of the 1990s, many Americans possess excess assets in their IRAs that they wish to donate to charities. Prior to the passage of H.R. 4, however, tax law effectively discouraged large charitable donations from IRAs.
Under previous tax law, all distributions from IRAs were taxed as ordinary income. Donors could contribute after-tax dollars and take a charitable deduction for the amount gifted.
Under the new law, the distribution in full can be transferred to Kosair Charities without any loss due to taxes. However, the contribution will not provide an income tax deduction.
By allowing taxpayers to donate up to $100,000 of funds accrued in IRAs to charity without including them in gross taxable income, Congress has freed older Americans from the burden of paying taxes on larger charitable donations.
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