|
On August 17, 2006 the Pension Protection Act of 2006 (H.R. 4) was signed into law.
IRA ROLLOVER PROVISION
The new law provides an exclusion from gross income for otherwise taxable IRA distributions of up to $100,000 per year from traditional IRAs and Roth IRAs for “qualified charitable distributions” made during 2006 and 2007 by plan owners who have attained at least age 70 ½ on the date of distribution to charity. Under the new Act, amounts paid directly to a qualifying charity from a donor’s IRA may be counted toward the donor’s minimum distribution requirement from the donor’s IRA.
The new rule applies to traditional IRAs and Roth IRAs only. Other forms of retirement plans such as 401(k), 403(b) annuities, defined benefit and contribution plans, profit sharing plans, Keoghs and employer sponsored SEPs and SIMPLE plans are NOT eligible.
The IRA rollover provision is available only for gifts made in 2006 and 2007.
Rollover gifts may NOT be used to establish gift annuities or charitable remainder trusts or be contributed to donor advised funds, supporting foundations or private foundations.
DONOR-ADVISED FUNDS: Prohibited Benefits
Severe penalities are imposed if a donor, advisor, or related party receives more than incidental benefits from a donor-advised grant. An incidental benefit is defined as the lesser of 2% of the grant or $86 (adjusted for inflation). The penalty, which is 125% of the benefit amount, can be imposed on any person who recommended the grant or who received the benefit.
Please consult with your tax advisor with respect to your particular situation.
Return to Legacy Fund
|
|
|
