Personal Planning Ideas

Americans have contributed hundreds of millions of dollars over the last 12 months under a 2006 law that enables people over age 70½ to make charitable gifts up to $100,000 from their IRAs to qualified organizations. These gifts can result in significant tax savings, even for donors who do not itemize their deductions. The law expires, however, at the end of 2007, and eligible IRA owners need to act soon. Some important points to remember:

• No income tax deductions are available for IRA gifts, but donors save taxes anyway because their gifts take the place of required minimum distributions that otherwise are 100% taxable.
• IRA gifts can relieve tax penalties that affect high income taxpayers, such as loss of AMT exemptions and reductions in itemized deductions and personal exemptions.
• Gift amounts are freed from future income taxes and “death taxes.”
• IRA gifts may reduce income taxes on Social Security benefits.

IRA gifts are simple to arrange. Just contact your IRA trustee or custodian as soon as possible – and before you receive any required minimum distributions. State that you wish to have a distribution check issued in our name and mailed to our office with a note identifying you as the donor. It’s important that you notify our office so we can coordinate with your IRA administrator to ensure that your gift meets the December 31 deadline and that you receive the necessary receipt.

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