Go to content Go to navigation Go to search

December 31, 2008

Groups Seek to Raise Cap on Retirement-Account Gifts

Earlier this year, Congress passed a set of tax laws that extended a beneficial provision for nonprofit organizations. Individuals more than 70 1/2 years old could contribute up to $100,000 of their Individual Retirement Account savings to charity without incurring taxes.

But some charity leaders worry that another recent law may discourage such donations. The Worker, Retiree and Employer Recovery Act of 2008 waives a requirement for IRA holders to accept a minimum distribution from their savings — a move aimed at preventing retirees from paying a tax penalty on IRAs decimated by declining stock values.

In a letter to Congressional leaders from the American Council on Gift Annuities and the National Committee on Planned Giving, the two groups called on Congress to increase or remove the $100,000 cap on charitable donations from IRAs.

They proposed instead to allow “life-income” donations to charities from IRAs — meaning retirees would be able to designate an amount of their savings that goes to a charity in return for a fixed amount of annual income. Such plans are already available for donors, but not when using IRA funds.

The nonprofit associations call their plans an “all-win” scenario: Charities could see increased donations from the measure and the federal government would get to collect taxes on the income distributions paid back to donors from their gifts.

— Eric Kelderman

Wednesday December 31, 2008 | Permalink

Commenting is closed for this article.

Previous: Obama Economic-Stimulus Plan Could Fight Poverty
Next: Foundation Sponsors Contest To Win Tickets to Inauguration

---

Copyright © 2009 The Chronicle of Philanthropy