Charities, including religious organizations such as Faith Ministries, have received an unusual boost from Congress and the President.
In early August, President Bush signed into law the Pension Protection Act of 2006. This bill contains a two-year IRA Charitable Rollover provision that will allow people age 70½ or older to exclude up to $100,000 from their gross income for a taxable year for direct gifts from a traditional or Roth IRA to a qualified charity. This applies to each of the ministries of Faith equally.
Interestingly, the new charitable giving provision is only in effect now through the end of 2007.
Provision highlights include:
The donor must be 70½ (or older) at the time of transfer. The gift should be made on or after the donor turns 70½ to ensure favorable tax treatment for that tax year.
The transfer must pass directly from the IRA custodian to the qualifying charity (such as Faith).
The transfer is limited to $100,000 per tax year (2006 and/or 2007).
A big plus: The transfer is not limited to 50% of adjusted gross income (AGI) like other cash gifts.
The Act applies only to traditional, rollover, and Roth IRAs, not to other types of plans like 401(k), 457, 403(b), etc. However, funds from the other types of retirement plans may be rolled into a traditional IRA in order to make the gift.
The transfer cannot be used to fund a charitable gift annuity or a charitable remainder trust.
This is a very unique opportunity for certain individuals who have a heart for the ministries of Faith. It is heartening that the government has allowed this limited-time program to benefit faith-based organizations. If you have been considering giving to Faith Christian School, the Faith Community Center, the new Seminary or any of our diverse ministries, you may benefit from the tax savings this provision permits.
For detailed information on this short-term opportunity, please contact Arvid Olson, Faith Legacy Foundation, at (765) 448-1986 or click here to send an e-mail.
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