Legislative update

Charitable IRA Rollover becomes law

On August 17, 2006 President Bush signed into law the Pension Protection Act of 2006, including provisions designed to promote and regulate charitable giving.  One of them, the IRA rollover provision, favorably impacts donors and non-profits. 

Taxpayers who are 70 ½ or more years old can make tax-free distributions to charities from their individual retirement accounts through 2007.  The maximum annual gift is $100,000. Donors tapping IRA funds don’t get a tax deduction, however they don’t have to pay the tax that would otherwise be owed on required distributions. 

Prior to PPA 2006, a donor had to report a withdrawal from an IRA as income and then declare an offsetting income tax deduction for the charitable contribution.   This new legislation provides a welcome incentive to donors who want to use the money in their IRA’s to make charitable gifts.  However donors must be motivated by charitable intent, as the donor is still giving away money and that money is gone.   

Donors considering a charitable gift from their IRA may want to contact their financial advisor or tax preparer for additional information and tax implications.     

Questions?
For more information, call Gina Taylor, 503-419-4193 or e-mail gtaylor@oregonfoodbank.org.