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Congress finally acted to extend a number of individual tax benefits that expired at the end of 2007, including the opportunity to make direct, non-taxable transfers from an individual retirement account (“IRA”) to certain charities.
During tax years 2008 and 2009, a taxpayer who is over 70 ½ may continue to direct his or her IRA trustee to make a direct distribution (up to maximum of $100,000 each year) to a qualifying charity. Because such distributions are not includible in the taxpayer’s gross income, they do not provide the taxpayer with a separate charitable deduction. Distributions from an IRA in excess of the $100,000 limit will be includible in the taxpayer’s income for the year of distribution, and the taxpayer will be allowed a charitable deduction for this excess amount if it is contributed to a qualifying charity (subject to the regular percentage limitations for charitable deductions).
In order to comply with certain U.S. Treasury regulations, we are informing you that any U.S. federal tax advice that may be contained in this document is not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. federal taxing authority or agency or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.