New Law Makes Giving IRA Assets More Attractive

Congress has recently taken important steps to encourage charitable giving.  As part of new tax laws passed in October 2008, you may now enjoy an opportunity to make tax-free charitable gifts.

The new legislation allows taxpayers over 70½ to make tax-free distributions to charity directly from their traditional and Roth IRAs (Individual Retirement Accounts) in 2008 and 2009.

Making gifts from IRA funds that would otherwise be subject to tax if withdrawn voluntarily or under mandatory withdrawal requirements may be a wise choice for many.  Donors can make tax-free charitable gifts from their IRA in any amount they choose up to $100,000 per year.  A couple with separate IRAs could each give up to that amount.  Amounts given to SFTS in this way will qualify as all or part of a mandatory withdrawal.

Benefits for donors
Making gifts using IRA assets can help some avoid adverse tax consequences.  While these gifts do not technically result in an additional tax deduction, they are nevertheless tax free.  In addition, you may bypass any additional tax on your Social Security benefits that could otherwise be due because of the increased income represented by an IRA withdrawal.

If you are among those concerned about estate and income taxes depleting IRA assets left to heirs as part of your estate, you may want to make tax-free distributions to charity in 2008 and 2009 and provide for inheritances to loved ones from other assets.  By giving in this way, you can assure that donated IRA funds will never be subject to income or estate taxation, thereby resulting in more assets available for your heirs.

Additional details
Keep in mind that to qualify for maximum tax benefits, gifts of IRA assets must be made directly from your IRA to SFTS.  To enjoy the full benefit of this IRA giving opportunity, gifts must be completed prior to December 31 of each year.  Check with your advisors or IRA administrator for more details and assistance in directing funds to SFTS and for information about how state taxes and other considerations may affect your plans.   As always, we are available to assist you in any way possible when making your gifts.

Rev. Peter D. Crouch,
Vice President for Institutional Advancement
e-mail: pcrouch@sfts.edu
phone: 1-800-447-8800