In "Division C -- the Tax Extenders and Alternative Minimum Tax Relief Act of 2008", Congress extended an excellent charitable planning opportunity for both 2008 and 2009. This act permits an IRA owner age 70½ or older to make a direct transfer to charity. This IRA rollover transfer may be up to $100,000 in one year and applies to both 2008 and 2009.
Age Requirement: 70½ years old
Donation Limit: Cannot exceed $100,000
Eligible Charities: Must go directly to a public charity. Contributions to supporting organizations, donor-advised funds, and private foundations, except in narrow circumstances, do not qualify for the tax-free treatment.
Eligible Retirement Accounts: Distributions can only be made from traditional Individual Retirement Accounts or Roth IRAs. Charitable donations from 403(b) plans, 401(k) plans, pension plans, and other retirement plans are ineligible for the tax-free treatment.
Do charitable contributions from IRAs count toward your annual IRA distribution requirement?
Yes, you can give your required distribution to a qualified charitable organization without having to
count it in your taxable income. (NOTE: Congress has waived the minimum distribution requirement for 2009)
Directly to the Charity: Distributions must be made directly from the IRA trustee payable to the public charity.
No Gifts in Return: You cannot receive any goods or services in return for charitable IRA rollover.
Written Receipt: Necessary for tax deduction.
WHO BENEFITS MOST FROM THE IRA ROLLOVER?
• Taxpayers who don’t itemize their deductions.
• Itemizing taxpayers who’ve reached the charitable giving limit.
• Taxpayers whose tax deductions decrease as their income increases.
…AND OF COURSE, the charity and the community it serves.
A Notice from the Salvation Army