Charitable Gifts from IRAs

The Pension Protection Act of 2006 allows eligible individuals to make charitable gifts to JVS by using funds that they have accumulated in their Individual Retirement Accounts without negative income tax consequences. This is a significant change from prior law.

Individuals age 70 ½ or older may be able to make charitable gifts to JVS from their IRA accounts for tax years 2006 and 2007, in an amount totaling $100,000 each year. Subject to certain limitations, the IRA charitable transfer will not be included in the donor’s income and will not be counted toward the usual limits on itemized charitable deductions. However, such gifts will not generate charitable income tax deductions.

Quick Facts:

Eligible parties: Individuals age 70 1/2 or older in 2006 and 2007
Amount eligible: Up to $100,000 in 2006 and $100,000 in 2007
Method: Must be a direct transfer from the IRA trustee to JVS
How to transfer: Contact your IRA trustee for forms and instructions; notify JVS

Benefits:

Not included in taxable income
Not included in itemized charitable deduction limit
Reduces exposure to additional income and estate taxes
Counts toward meeting IRA minimum distribution requirements
Can reduce the minimum distribution requirements for future years
Does not count toward determining the taxation of Social Security benefits
Always consult with your tax advisor prior to making any IRA transfers to make sure you will achieve your tax and philanthropic objectives.

For more information, please contact: Danielle Wachs, Director of Development, at 617.399.3128 or dwachs@jvs-boston.org.