If you wish to donate to the EYC and are an IRA owner, age 70½ or over, you can directly transfer tax-free, up to $100,000 prior to December 31, 2007 to an eligible charitable organization. This provides an exclusion from gross income for otherwise taxable IRA distributions from a traditional or Roth IRA in the case of qualified charitable contributions. Eligible IRA owners can take advantage of this provision, regardless of whether they itemize their deductions. To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Transferred amounts are counted in determining whether the owner has met the IRA’s required minimum distribution rules. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions.
IRA owners are encouraged to consult with their tax advisors if they wish to make a donation from their IRAs. If you have any questions, you may contact Paul R. Pillat, Vice Commodore (770)231-2355.
Posted by Paul Pillat – Vice Commodore & Treasurer