Charitable Planning Under The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
|
|
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extends charitable giving incentives.
Specifically, a donor may now make a direct, outright gift to a public charity from his/her IRA account, and the distribution will be excluded from gross income for tax purposes. However, the donor will not receive an income tax charitable deduction for the gift. Due to late passage of this bill, the provision is retroactive to January 1, 2010 and extends through January 31, 2011 to be counted as a 2010 distribution, which can qualify for your minimum distribution requirement. Additionally, the law extends the provisions for gifts in 2011 that you wish to make prior to December 31, 2011. All such gifts may be counted against your minimum distribution requirement.
There are limitations and restrictions:
- The donor must be at least 70 ½ years of age.
- The distribution must go directly from the IRA trustee to a qualified charitable organization.
- There is a $100,000 per taxpayer, per year limit.
- The law will be effective for distributions made from January 1, 2010 to December 31, 2011.
- The donor may receive no economic benefit for having made the contribution.
Planning Tips - Questions and Answers:
Q. Suppose my retirement plan assets are not in an IRA but in another type of qualified plan. Can I still take advantage of this opportunity?
Let's assume, for example, that you have assets in a 401(k) plan that you'd like to contribute. To do so, roll over the amount you want to contribute from your 401(k) to your IRA (or, if you don't already have an IRA, to a newly created IRA). Thereafter, you will request that your IRA trustee/administrator transfer directly to AmeriCares the amount you want to contribute.
Q. Can I make this contribution from my IRA to a charitable organization to establish a charitable gift annuity?
No, this law does not allow the donor to receive an economic benefit from the gift.
Q. Can I direct that the contribution be designated for a specific effort?
As long as there is no control retained by you over the administration and use of the contribution and you receive no economic benefit from the gift, and provided that AmeriCares has absolute ownership of the contribution, you can make your gift to a pre-existing designated AmeriCares fund.
Q. Suppose I have a pledge outstanding to AmeriCares for an annual gift. Can I pay my pledge from my IRA under the new law?
The law gives you the opportunity to use IRA funds to pay these commitments up to $100,000.00 in each of the calendar years 2010 and 2011 without having to pay income tax on the IRA distributions. In some cases couples could direct IRA gifts up to $400,000 between January 1, 2011 and December 31, 2011 by utilizing their 2010 and 2011 extensions.
Q. How do I make a gift to AmeriCares?
To make a gift to AmeriCares, notify the plan administrator of your IRA account that you want to make a "charitable IRA rollover." Tell them the amount and the following beneficiary information:
AmeriCares Foundation, Inc.
88 Hamilton Avenue
Stamford, CT 06902
Tax ID: 06-1008595
To inform us that you have arranged for this gift to be made, please contact Malaine Miller at 203-658-9634 or email MMiller@AmeriCares.org, or call toll-free 1-800-486-HELP (4357), ext. 634.
To learn about other ways to make a planned gift to AmeriCares, please click here
|