Congress has re-authorized legislation that allows donors to make charitable gifts from their IRA accounts during tax years 2008 and 2009 without incurring income tax on the withdrawal. For the 2008 tax year, you must act by December 31 to take full advantage of the current legislation.
If you are age 70½ or older, are required to take minimum withdrawals and you do not need them for personal use, this may be a great way to make a gift to The Humane Society of the United States. This is good news for people who want to make a charitable gift during their lifetime from their retirement assets, but have been discouraged from doing so because of the income tax penalty.
For additional information, please contact the HSUS Department of Philanthropy at 1-800-808-7858 or gifts@humanesociety.org.
To Qualify:
- You must be age 70½ or older at the time of the gift.
- Transfers must be made from a traditional or Roth IRA account by your plan provider directly to the charity. Funds that are withdrawn by you and then contributed do not qualify.
- Gifts from 401k, 403b, SEP and other retirement plans do not qualify.
- Gifts must be outright. Distributions to donor-advised funds, supporting organizations, or life-income arrangements such as charitable remainder trusts and gift annuities are precluded.
Benefits—Qualified Charitable Distributions:
- Can total up to $100,000 in each tax year (if your spouse has a separate IRA account, you can each contribute up to $100,000 per tax year)
- Can be excluded from your gross income for federal income tax purposes on line 15a of Form 1040 (no charitable deduction is available, however)
- Can be used to satisfy your Minimum Required Distribution (MRD)
- Are not subject to the 50% deductibility ceiling or the 2% rule
How the New Law Works
Pat, aged 80, has $450,000 in an IRA and has pledged to give us $75,000 this year. If Pat transfers $75,000 to us from the IRA, she will avoid paying income tax on that amount. She cannot, however, claim a charitable deduction—it is a pure "wash." Pat has found an easy way to benefit us without tax complications.
If she desired, Pat could give more than $100,000. The legislation allows a maximum $100,000 gift in both the 2008 and 2009 tax years. So Pat could give $100,000 each year. If her spouse has an IRA and is 70½ or older, he can also give up to $100,000 each year.
How to Make a Gift
Contact your IRA custodian to transfer your desired gift amount to a charitable organization.
Additional Note for All IRA Account Holders
Regardless of your age, you can also list The Humane Society of the United States as a beneficiary of your IRA. If so, please include our tax ID number: 53-0225390.
For More Information
It is wise to consult tax professionals if you are contemplating a gift under the new law. Please feel free to contact the Department of Philanthropy office with any questions.
Updated Oct. 28, 2008
