Neighborhood Healthcare

Use Your IRA as Never Before

On Aug. 17, 2006, President Bush signed into law new tax incentives for charitable gifts from donors who are 70½ or older. The Pension Protection Act of 2006 encourages financial support of charitable organizations across the United States.

Under the law, you can make a lifetime gift using funds from your individual retirement account (IRA) without undesirable tax effects. Previously you would have had to report any amount taken from your IRA as taxable income, then take a charitable deduction for the gift, but only up to 50 percent of your adjusted gross income. In effect, this caused some donors to pay more in income taxes than if they didn’t make a gift at all.

Fortunately, now these IRA gifts can be accomplished simply and without tax complications. Plus, you can make the gift now—while you are living and able to witness the benefits of your generosity.

You may contribute funds this way if:

You are age 70½ or older
The gift is $100,000 or less each year
You make the gift on or before Dec. 31, 2007
You transfer funds directly from an IRA or Rollover IRA
You transfer the gift outright to one or more public charities, but not supporting organizations or donor advised funds
You cannot receive benefits from us in exchange for the gift

How The New Law Works

Sally, aged 80, has $450,000 in an IRA and has pledged to give $75,000 this year. If Sally transfers $75,000 from the IRA, she will avoid paying income tax on that amount. She cannot, however, claim a charitable deduction—it is a pure “wash.” Pat has found an easy way to benefit charity without tax complications. If she desired, Sally could give more than $100,000. The legislation allows a maximum $100,000 gift in both the 2006 and 2007 tax years. So Sally could give $100,000 each year. If her spouse has an IRA and is 70½ or older, he can also give up to $100,000 each year.

How to Make a Gift
Prior to making a gift, contact the recipient organization to ensure that they are an eligible organization. Once you have received this confirmation and any special instructions, contact your IRA custodian to transfer your desired amount.

For More Information
It is wise to consult tax professionals if you are contemplating a gift under the new law. Please feel free to call Connie Burke at 760-520-8365 or connieb@nhcare.org with any questions.

Call our Philanthropy Department at (760) 520-8365 or email connieb@nhcare.org for information on this and other giving opportunities.




Home \| Career Opportunities \| In the News \| Press Releases \| Events \| Annual Report \| Board of Directors \| Our Supporters \| It's About People	Use Your IRA as Never Before On Aug. 17, 2006, President Bush signed into law new tax incentives for charitable gifts from donors who are 70½ or older. The Pension Protection Act of 2006 encourages financial support of charitable organizations across the United States. Under the law, you can make a lifetime gift using funds from your individual retirement account (IRA) without undesirable tax effects. Previously you would have had to report any amount taken from your IRA as taxable income, then take a charitable deduction for the gift, but only up to 50 percent of your adjusted gross income. In effect, this caused some donors to pay more in income taxes than if they didn’t make a gift at all. Fortunately, now these IRA gifts can be accomplished simply and without tax complications. Plus, you can make the gift now—while you are living and able to witness the benefits of your generosity. You may contribute funds this way if: You are age 70½ or older The gift is $100,000 or less each year You make the gift on or before Dec. 31, 2007 You transfer funds directly from an IRA or Rollover IRA You transfer the gift outright to one or more public charities, but not supporting organizations or donor advised funds You cannot receive benefits from us in exchange for the gift How The New Law Works Sally, aged 80, has $450,000 in an IRA and has pledged to give $75,000 this year. If Sally transfers $75,000 from the IRA, she will avoid paying income tax on that amount. She cannot, however, claim a charitable deduction—it is a pure “wash.” Pat has found an easy way to benefit charity without tax complications. If she desired, Sally could give more than $100,000. The legislation allows a maximum $100,000 gift in both the 2006 and 2007 tax years. So Sally could give $100,000 each year. If her spouse has an IRA and is 70½ or older, he can also give up to $100,000 each year. How to Make a Gift Prior to making a gift, contact the recipient organization to ensure that they are an eligible organization. Once you have received this confirmation and any special instructions, contact your IRA custodian to transfer your desired amount. For More Information It is wise to consult tax professionals if you are contemplating a gift under the new law. Please feel free to call Connie Burke at 760-520-8365 or connieb@nhcare.org with any questions. Call our Philanthropy Department at (760) 520-8365 or email connieb@nhcare.org for information on this and other giving opportunities. Home \| Career Opportunities \| In the News \| Press Releases \| Events \| Annual Report \| Board of Directors \| Our Supporters \| It's About People