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Opportunity Is Knocking: Your IRA Is the Key

If you're looking for the most tax-effective gift to make to a charitable organization, your individual retirement account (IRA) may very well be the best choice.

The Pension Protection Act of 2006 presents a new giving opportunity. The law allows individuals aged 70½ or older to make gifts now to qualified charitable organizations like ours using funds transferred directly from their IRAs. Furthermore, these individuals will not have to pay taxes on the amounts transferred. You can transfer any amount you desire up to $100,000 on or before Dec. 31, 2007.

Your Benefits

The transfer counts toward your minimum required distribution as long as you have not yet received your 2007 distribution.
The transfer generates neither taxable income nor a tax deduction, so you will receive the benefit even if you do not itemize your tax deductions.
You can witness the difference your philanthropic dollars make to us.

How the New Law Works
Sandy, aged 73, has $150,000 in an IRA. She made a pledge to give us $15,000 this year. She had the choice of giving cash or other assets to fulfill the pledge, but now she has another option. If she transfers $15,000 to us from her IRA on or before Dec. 31, 2007, she avoids paying income tax on $15,000. She will not, however, be able to use it as a charitable deduction—it is a pure wash. The Pension Protection Act gives her an easy and convenient way to benefit us without tax complications.

Another tax-smart strategy is to name our organization as beneficiary of all or a portion of your IRA assets. By naming us as beneficiary of your IRA, you can leave us a gift that is free of all income and estate taxes because we are a charitable organization.

If you would like assistance in completing a gift from your IRA, please contact Jillian McCabe at 240-485-0767 or jillian@phassociation.org.

Click the icon to request more information about retirement plan assets. We'll e-mail it to you within minutes!