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Emergency
"Bail-Out" Act Helps Donors Make Charitable Gifts |
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The Emergency
Economic Stabilization Act of 2008 signed into law
in October includes an extension of the IRA
Charitable Rollover. The extension is retro-active,
applying to distributions made throughout both the
2008 and 2009 tax years. The extension will allow
individuals 70½ and older to donate up to $100,000
from their IRAs to charities tax-free. Making gifts
in 2008 and 2009 from IRA funds that would be
subject to tax if withdrawn voluntarily or under
mandatory withdrawal requirements may be a wise
choice for many. Eligible individuals should be
aware, however, that while making gifts to charities
directly from their IRA will generate tax savings,
these distributions are not tax-deductible.
Key provisions
include the following:
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Donors must be
age 70.5 at the time the gift is made
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An individual
can give a maximum of $100,000 in 2008 and an
additional $100,000 in 2009. A spouse can give
an equal amount from his/her IRA.
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Individuals can
make as many gifts in any amount to as many
charities as desired as long as the total does
not exceed $100,000 for 2008 and an additional
$100,000 in 2009.
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The gift may
NOT be made in exchange for a charitable gift
annuity or to a charitable remainder trust.
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The gift may
NOT be made to a private foundation, donor
advised fund, or supporting organization [as
described in section 509(a)(3)].
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Donors who have
reached age 70.5 and are required to make
minimum required distributions can direct the
entire amount to charity in satisfaction of
their minimum required distribution.
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