IRAs and Charitable Contributions for taxpayers over 70 1/2
This entry was posted on 12/12/2006 2:42 PM and is filed under uncategorized.
There is a new tax saving strategy for people over age 70 1/2 who have IRAs and make charitable contributions. This is change is part of the Pension Protection Act of 2006.
"Under the new law, for the years of 2006 and 2007, an individual age 70 ½ or older can make direct charitable gifts of up to $100,000 per year from an IRA to a qualified charity and not have to report the IRA distributions as taxable income on his or her federal income tax return. Moreover, such distributions count toward the required minimum distribution." -
Advisor ReportThe Advisor report allows states that, "Furthermore, the distribution has to be made to a qualified charity and be distributed directly to the organization." I read this to say that the taxpayer must not have the money in their hands at any time.
The reason this strategy saves some people some tax money is by using it, is that lowering ones Adjusted Gross Income (AGI), which this does, is good or has no harmful effect.
