Take Advantage (Fast) of the New IRA Charitable Rollover Provision

Donors must act quickly to take advantage of a new tax incentive enacted this August as part of the Pension Protection Act. The provision -- which is only in effect until December 31, 2007 -- allows taxpayers who are 70 years or older to contribute funds tax-free from their Individual Retirement Accounts directly to charitable organizations. This can be a powerful incentive for giving for these taxpayers, who are required by law to take distributions from their IRAs, money that is often subject to income taxes. The IRS has just released a letter explaining that there will be a procedure on the 2006 Form 1040 to allow eligible taxpayers to exclude direct distributions from their IRA to charities from their taxable income

The Independent Sector has a new IRA Charitable Rollover web page, with fact sheets that explain how both donors and charities can take advantage of this provision if they move quickly.

Susan Herr

Posted at 8:00 AM, Nov 21, 2006 in Tax Issues | Permalink | Comment