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An Opportunity to Give From Your IRA Tax Free
Individuals who are over the age of 70 ½ and have individual retirement accounts (IRA) have a great opportunity this year and in 2007 to rollover a portion of their IRAs as tax free gifts. In making the rollover gifts, there may be additional tax savings, as the distributions going to a charity are not taxed. Here are some
highlights:
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The Pension Act of 2006 permits individuals to rollover up to $100,000 from an IRA directly to a qualified charity without recognizing the assets transferred to the charity as income.
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The deadline for doing the charitable rollovers is December 31, 2007, so individuals may make gifts by the end of the current year (December 31, 2006) and the next year (December 31, 2007)
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To qualify as a charitable rollover, the donor must be 70 ½ years of age or older.
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An individual may exclude up to $100,000 from his or her gross income for each tax year for qualified charitable distributions from an IRA. Since the qualifying charitable rollover is not included in gross income or itemized deductions, potential tax savings are possible as itemized deductions and other tax benefits are sometimes limited based on income levels.
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Most contributions to public charities are considered qualified charitable contributions, except for distributions to donor-advised funds.
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The gift must be made from the IRA directly to the qualifying charity.
For more information on this opportunity, please contact
our office at (619) 291-3383.
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