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Charitable IRA legislation extended
The charitable IRA legislation has been extended through 2009, offering you tax incentives for charitable gifts if you are 701⁄2 or older.
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Under the extended law, you can use funds from your IRA to make a lifetime charitable gift free of tax obligations. Prior to the law, you would have to report any amount taken from your IRA as taxable income. You could then take a charitable deduction for the gift, but only up to 50 percent of your adjusted gross income. In effect, this caused some donors to pay more in income taxes than if they didn’t make a gift at all.
Fast Facts:
•70 1/2 years of age or older
•Gifts total $100,000 or less each year in 2008 and 2009
•You make the gift to a public charity (this includes Newton Medical Center)
•You transfer funds directly from an IRA
How the charitable IRA legislation works for minimum distributions:
Sue retired from her career about 12 years ago and has been receiving retirement income ever since. Part of her income is in the form of minimum distributions from an IRA since turning age 701/2. In Sue’s situation, she receives enough income from other retirement funds and Social Security, so she doesn't need the IRA distributions now or in the foreseeable future.
Yet each year she must take receipt of these minimum distributions to comply with the Internal Revenue Code and pay income tax. Under the law, Sue can transfer the minimum distributions directly to Newton Medical Center.
Her benefits are twofold: 1) She avoids paying income tax on the unwanted minimum distributions, and 2) she uses those funds to help support NMC’s mission. Instead of waiting until after her lifetime to leave her IRA funds to our organization, Sue can witness the benefits of her generosity while she’s living and glimpse the legacy she always wanted to leave.
Simply contact your IRA administrator for the forms necessary to transfer your desired gift amount to the charitable organization of your choice.
Questions & Answers:
Q. I have several retirement accounts, pensions and IRAs. Does it matter which retirement account I use?
A. Yes. Gifts can be made from an IRA or Rollover IRA. Pension, profit sharing and other forms of retirement funds do not fall under the new legislation.
Q. Can I make a gift to a charitable remainder trust?
A. No. Only gifts made directly to qualified charities are eligible for the tax benefits.
Q. There are two organizations I want to support. How can I do that?
A. You can give each charitable organization $50,000 in 2008 and 2009, or any other combination that totals $100,000 or less per year.
For more information:
It is wise to consult with your tax professionals if you are contemplating a charitable gift under the new law. Please feel free to contact our office with any questions you may have.
Rachel Newell
Director of Development
Newton Medical Center
P.O Box 387
Newton, KS 67114
Phone: 316.804.6129
E-mail: rachel.newell@newmedctr.org
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