In 2009, there are no required individual retirement account minimum distributions for people over the age of 70 ½. Last year, the IRA charitable rollover extension was put into effect as a retroactive expansion of the Pension Protection Act of 2006. That act allowed individuals over the age of 70 ½ to donate up to $100,000 per year from their IRAs to charities without paying taxes on the distributions. But the year is coming to an end, and so far there has been no extension.
At 70 ½ investors are required to pull funds from their IRA. The $100,000 exemption allows individuals to avoid paying taxes on the money while contributing to the community. The IRA custodian writes a check directly to the qualified charitable organization. The law is in effect through the end of 2009 and is retroactive for all of 2008.
Jerry Schaeffer is the Executive Director of the Henry County Community Foundation, a non-profit focused on enabling donors to establish endowment funds for the charity or charities they care about most in Henry County or for scholarships to enable students to further their education. She states, "We have noticed that the IRA charitable rollover is helpful to people and gives people one more option to use their money for charitable means. The IRA distribution legislation is a gift to individuals and to the non-profit industry. It could make a difference in whether an individual is able to continue supporting his or her favorite charity, while allowing more of their intended donation to go to the charity rather than to taxes. The gifts allow the Community Foundation to further sustain the future of local non-profits through their endowments and give hope to our future leaders through scholarships for higher education."
The first time the tax break was effective was in 2006 when the Pension Protection Act became law. That was the first time an individual could pull from an IRA without calling it income and therefore avoid paying tax on the money. Congress took it a step further, passing legislation in early December 2008 eliminating all minimum requirements. Meanwhile, because of the volatility in the stock market, many individuals' investments lost substantial value, and the legislation was created with the recognition that people should not be forced to withdraw money when their account balances were at lower levels.
If you consider a charitable IRA rollover to the Henry County Community Foundation, a qualified charitable organization, please do not hesitate to contact the Foundation if you wish to donate to an existing fund, the Unrestricted Fund for Community Grants or establish a permanent endowment to benefit a specific charity, multiple charities or start a scholarship. Give now to take advantage of the IRA charitable rollover extension. Only contributions made between January 1, 2008 and December 31, 2009 are eligible for the enhanced tax benefit. Speak with your financial advisors and contact the Foundation for additional information on this significant opportunity by calling 765/529-2235 or visiting 700 S. Memorial Drive in New Castle or going online at www.henrycountycf.org to check out the new gift charity section on planned giving.
