No Minimum IRA Distributions Required for 2009
. . . But IRA Gifts Remain Attractive for Eligible Donors

Last fall, Congress extended through 2009 the law permitting IRA owners age 70½ and older to make qualified charitable distributions of up to $100,000. In 2006-2008, these gifts had the advantage of counting toward a donor’s required minimum distributions.  However, minimum distributions have been waived during 2009 under the Worker, Retiree and Employee Recovery Act of 2008, signed into law last December.  Still, good arguments can be made for considering charitable gifts from IRAs in 2009, if you are eligible:

• IRAs may be your best available charitable giving resource, especially if other assets are tied up in time deposit accounts or annuities.  
• IRA funds generally will be subject to heavy federal income taxes and/or transfer taxes whenever they are withdrawn or paid to your beneficiary in the future.  Charitable distributions occur free of federal taxes.
• IRA gifts – especially larger gifts (maximum $100,000) – can reduce the size of your required minimum distributions from IRAs in future years.
• The fact that IRA gifts are exempt from all federal taxes may be important if you do not itemize your deductions.  Prior to 2006, donors who made withdrawals from IRAs for charitable giving purposes were fully taxable on such amounts, even though charities ultimately received the funds.   These gifts were tax deductible, in theory, but people who used the standard deduction could face increased taxes as a result of their generosity.

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