The Pension Protection Act of 2006 (PPA 2006) was passed by Congress and signed into law by President Bush on August 17, 2006. It opens up powerful new options for charitable giving from IRAs.
The new law says that people age 70 ½ and older can instruct IRA trustees to make transfers to 501(c)3 organizations they support without incurring taxable income on those amounts. Up to $100,000 can be given annually in this manner, up to December 31, 2009.
No charitable deductions are allowed but gift amounts will not be included in the donor’s income. Donors must gift through a traditional or Roth IRA; other retirement plans such as pensions and 401(k) plans and others are not eligible. Only the IRA trustee can transfer gift amounts to a qualified organization. If the IRA owners withdraw funds and then contribute to the charity separately, amounts withdrawn will be included in the donor’s gross income. IRA gifts cannot be made to “life income gifts” such as Charitable Gift Annuities.
To make a charitable gift through your IRA, just contact your IRA trustee to transfer your gift amount to a 501(c)3 organization.
For more information or if you have any questions, please call us at Good Samaritan Foundation (308) 865-2700.