New Law Allows Charitable Distributions from your IRA

A little known section of the same federal bill that gave you expanded tax incentives for conservation easement donations also offers you a rare tax break when you invest in the land trust community’s good work.

Specifically, if you or someone you know is 70½ years of age or older, the new law permits you to make direct contributions from your individual retirement account to a charitable organization of your choice –– up to $100,000 per year in 2006 and 2007. These charitable contributions can satisfy your IRA’s required yearly minimum distribution and will be excluded from your federal taxable income!

One essential detail: your plan administrator must issue the check directly to the charity. And because your contribution is not taxable income, you cannot claim an additional charitable deduction. However, examples show that gifting funds directly from your IRA is one of the most tax beneficial means of charitable giving.

Consult your plan administrator and/or your tax advisors for more information about this provision of the Pension Protection Act of 2006.