IRA Holders Can Make 2011 Charitable Distributions

Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 affecting charitable contributions, consult your tax adviser or attorney.

Persons aged 70½ or older can again enjoy tax savings by making charitable gifts directly from their Individual Retirement Accounts (IRAs), thanks to a provision of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was signed into law December 17, 2010.

The December 17, 2010, law extends legislation originally adopted in 2006 and extended in 2008 (that extension expired December 31, 2009). For a charitable gift made from an Individual Retirement Account (IRA) not to be taxed as income, the following must be true:

• the gift was made in 2011;
• the IRA holder is age 70½ or older;
• the gift totals $100,000 or less each year;
• the charity that received the gift is eligible to receive tax-deductible contributions;
• the charity is not a section 509(a)(3) supporting organization; and
• the withdrawal goes directly from the IRA to the charity.

The donor does not need to itemize his or her taxes to benefit from the distribution. If the donor does itemize, however, he or she cannot also take the distribution as a deduction.

Please contact your professional advisors or the Northern Indiana Community Foundation, Inc. for more information.