Chesterton Tribune

New law extends tax free IRA charitable giving

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The Porter County Community Foundation reminds individuals who own IRAs that they can continue to make tax-free contributions from their IRA to charities.

The recent tax bill approved by Congress -- the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 -- included a two-year extension of the charitable IRA provision, according to the PCCF. The law allowing the tax-free distributions from IRAs for charitable purposes was set to expire but will now be in effect through 2011.

The PCCF said the new law is important to local charities in an uncertain economy. The PCCF notes that some retirees have more money in their IRAs than they need for living expenses or for long-term care, but that income tax must be paid on IRA withdrawals. Under the new law passed by Congress last month, IRA assets can be transferred directly to charity, excluding the funds from the IRA owner’s income and from income taxation.

According to the PCCF, a single person can transfer up to $200,000 free from federal tax; a married couple can transfer up to $400,000 free from federal tax from separate accounts.

“It is a win-win -- for people who would rather give to charity than pay taxes and for the nonprofit organizations they choose to support,” said Barb Young, Porter County Community Foundation President.

The PCCF is among the qualified public charities that can receive the IRA charitable transfers and can help donors choose from several fund options for their gift. To learn more, contact the Foundation at 465-0294 or visit online at www.portercountyfoundation.org

 

Posted 1/3/2011

 

 

 

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