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New IRA law offers historic opportunity to advance conservative principles

August 22, 2006| By The Heritage Foundation

 

For information about making a contribution from your IRA in 2009, click here. 

 

The Heritage Foundation's 2006 summer interns pose with Heritage President Ed Feulner in Allison Foyer.

Giving through your IRA

  • Make a charitable gift directly from your IRA in 2006 or 2007.
  • Your donation will not be taxed as an IRA withdrawal.
  • Your contribution will count towards your mandatory IRA withdrawal.
  • For more information, call Heritage's Gift Planning Office at (800) 409-2003.

Conservatives age 70 ½ or older have an exciting new way to support The Heritage Foundation—by making a tax-free gift directly from your IRA.

Are you one of the millions of Americans age 70 ½ or older faced with making a mandatory withdrawal from your IRA? Have you often wished you could use IRA funds to make a gift to your favorite charity without it being treated as a taxable withdrawal? Now you can.

Thanks to the Pension Protection Act of 2006, which was just signed into law, Americans will be allowed to take advantage of this unprecedented opportunity to make gifts directly from their IRAs. And you won’t have to pay taxes on these funds when you make the contribution!

But time is short—you have until December 31 to make your IRA contribution for the 2006 tax year. Though you can also make a gift from your IRA in 2007, a gift after December 31 will not count towards your 2006 mandatory withdrawal and taxes.

What you need to know

  • The law is applicable only in the remainder of 2006 and in 2007. You may make a maximum gift from your IRA of $100,000 in either or both years.
  • You must be 70 ½ years of age or older. This age group is already faced with mandatory withdrawals, and a charitable gift counts as a withdrawal without the consequences of increasing your taxable income and/or income tax bracket.
  • Your gift must be made directly from your IRA to Heritage in order to qualify. Contact your IRA custodian about how to make a transfer.
  • You will not receive a charitable income tax deduction for this type of gift. However, because these gifts do not fall under normal deduction rules, it means you can make gifts in excess of the 50 percent of Adjusted Gross Income ceiling for cash gifts.
  • Gifts must be made before December 31, 2006 to qualify toward the 2006 taxable year. Donors should contact their IRA custodians directly about making a transfer, and extra time should be allowed to process the request before the December 31 deadline.

If you have any questions about this exciting opportunity to make gifts from your IRA, please call our Gift Planning office toll-free at (800) 409-2003.