Charitable IRA Distributions for 2007
The Pension Protection Act of 2006 allows you to make distributions in
2007 directly from your IRA to one or more charities without the
distributions being included in taxable income and subject to
withholding. You must be 70½ or older at the time of the
distribution.
Previously, withdrawals from IRAs for charitable gifts were taxable to the
withdrawing donor. In 2007 you are able to make a tax-free gift by
instructing the trustee of your IRA to transfer the withdrawal directly to
the charity. Another benefit is that the funds transferred from your
IRA to a charity count towards your mandatory withdrawal.
Making a charitable distribution from an IRA rather than from other assets
is especially appropriate if you:
- Do not itemize deductions;
- Are already at the deduction limit for 2007;
- May lose some of your itemized deductions because of your income
level, or
- Are required to take distributions, but do not need them for living
expenses.
Want more information?
This document is for information purposes only and should not be
construed as legal, tax or financial advice. Please consult your tax
or legal advisor for more information.
Information provided courtesy of PG Calc.
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