On Thursday, August 17, the Pension Protection Act of 2006 was signed into law. In brief, members of your congregation or organization who meet the criteria can make gifts from their IRAs to your organizational endowment fund at the Lutheran Community Foundation. This act allows participants of traditional and Roth IRAs to make direct transfers from such plans to qualified public charities without having to take such distributions into their taxable income.
Some qualifications apply:
• Donors must be 70-1/2 or older on the date of the gift.
• Donors may give up to $100,000 per year without having to count the distribution / charitable gift as taxable income, but there is no income tax deduction for the gift.
• Charitable gifts must be made outright to charity by the IRA plan administrator. Lifetime income gifts and gifts to donor-advised funds and supporting organizations do not qualify for this incentive.
• This program is effective for distributions made in 2006 and 2007.
Given these parameters, the charitable rollover provision provides the most opportunity for older, charitably-inclined clients who are required to take their required minimum distributions from an IRA, but would prefer to direct it to charity instead. They also may have either maxed out on tax deductions or don't itemize.
More information on the new legislation can be found at http://www.pgdc.com/usa/item/?itemID=368499.
Contact an LCF gift planner at 800-365-4172 to discuss charitable rollover opportunities.
Provision Expired December 31, 2007
The provision in the Pension Protection Act that allowed tax-free distributuions from IRA's for charitable purposes expired on December 31, 2007. There is current pending legislation to extend the provision. For more information:
http://www.pgdc.com/pgdc/news-story/2008/01/17/crs-updates-qualified-distributions-iras