VHS BULLETIN
Congress Renews IRA Gift Opportunity
You are probably already aware that on October 3 President Bush signed into law the historic $700 billion rescue plan.
The legislation implementing the plan contains important provisions relating to charitable giving.
The Emergence Economic Stabilization Act of 2008, the main feature of which is the bailout package, also extends certain portions
of the Pension Protection Act of 2006 that expired on 12/31/2007.
This law provides that, in each of the years 2008 and 2009, an owner of a traditional or Roth IRA may instruct the trustee to
distribute directly to a public charity up to $100,000 without the distribution being included in taxable income, and that distribution will count toward the IRA owner's mandatory withdrawal amount.
To qualify for IRA rollover treatment, the donor must direct the IRA manager to transfer funds directly to charity. A withdrawal
followed by a contribution will still have to be reported as income. The donor must be at least 70½ and the donee must be a tax-exempt
organization to which deductible contributions can be made. Donor advised funds and supporting organizations are not eligible. The gift
must be outright; rollovers to a planned gift, such as a gift annuity or a charitable remainder trust, do not qualify. Neither do outright
distributions to charity from employer-sponsored retirement plans, such as Simple IRAs, 401(k)s, and 403(b)s. Also, note that IRA rollovers may be includable in a donor's income for state and local tax purposes and may not earn an offsetting charitable deduction, depending on state and local law.
The new legislation offers a welcome incentive to donors who want to use the money in their IRAs to make charitable gifts to public
charities such as the Virginia Historical Society.
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