2011-12-01 / Letters

Law Allows For Tax-free Charitable Transfers From IRAs

To The Editor,

Since 1974, millions of Americans have saved billions of pre-tax dollars in Individual Retirement Accounts (IRAs). Thanks to continued savings and investment returns, an estimated $3.6 trillion is currently invested in IRAs, and the total continues to grow. Last December, Congress extended a federal law allowing IRA owners to share the wealth of their retirement savings by giving directly to charity, without first counting it as income and paying income tax.

This is a wonderful win-win – both for people who would rather give to charity than pay taxes and for the nonprofit organizations they choose to support. Thanks to decades of deliberate saving and favorable investment returns, a substantial number of today”s retirees have more money in their IRAs than they”ll ever need. Many have expressed an interest in giving the funds to charity but, until this law was passed, income tax had to be paid on all withdrawals. Others have asked about designating their children as beneficiaries, but that may draw additional tax consequences. If an IRA is left to an heir, a good portion of the IRA goes to estate taxes and the income taxes of beneficiaries. In fact, experts estimate, depending on the value of one”s estate, as much as 68 percent of the inherited IRA assets could be paid in taxes; thus leaving only 32 percent to the heir.

Through an extension of the Pension Protection Act of 2006, a different option remains available: By transferring IRA assets directly to a charity, the money is not included in the IRA owner”s income and – most importantly – is not taxed, preserving the full amount for charitable purposes. The law covers all gifts made through Dec. 31, 2011.

Holders of traditional and Roth IRAs who are 70 years or older can make direct charitable transfers up to $100,000 per year.

This really is a limited-time offer: The window is open now, but it will close on Jan. 1, unless Congress extends it again.

If you are interested in and care deeply about this community and your fellow neighbors, this is the opportunity of a lifetime to make the gift of a lifetime.

Please contact your tax preparer, lawyer, financial advisor or favorite charity to find out how you can save on your taxes and help local nonprofits through an IRA gift.

Jerry Spessard, Planned

Giving Committee Chair

Fulton County Medical Center


Return to top