Tax Free Gifts From Your IRA
In 2011, under the extended charitable IRA legislation, you can make charitable gifts now using funds from your individual retirement accounts (IRAs) without undesirable tax effects.
Previously you would have had to report any amount taken from your IRA as taxable income. You could 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 they would have if they hadn’t made a gift at all.
Fortunately, now these IRA gifts can be accomplished simply and without tax complications. Plus, you can make the gifts now—while you are living and able to witness the benefits of your generosity. This unique opportunity expires at the end of 2011.
You may contribute funds this way if:
You are age 70 or older at the time of the gift.
The gifts total any amount up to $100,000 in 2011.
You transfer funds directly from an IRA.
You transfer the gifts outright to one or more qualified charities, but not to supporting organizations, or for gift annuities, charitable trusts or donor advised funds.