By Rose S. Prinzi
You may have noticed in recent news reports that the U.S. House of Representatives passed a two-year extension on the Charitable IRA legislation as part of the Emergency Economic Stabilization Act of 2008. As a result, the new law allows taxpayers 70 ½ and older to rollover amounts from their IRA directly to charity and bypassing income tax.
Like many working people, your IRA may become the largest part of your estate. You may need to do some “asset balancing” to avoid future tax problems. If you are over age 70 ½, you can rollover up to $100,000 annually from your IRA to charity. These gifts can be made tax-free and will help balance your IRA value with other estate assets. Depending upon your income level, there may be additional income tax benefits.
Under the standard IRA distributions, income tax must be paid on all withdrawals. Also, in the case of an IRA as part of an estate, IRA beneficiaries may incur unintended tax consequences, therefore reducing the value of those assets to the recipient. By transferring your IRA assets to a charitable organization, like the Chautauqua Region Community Foundation, the money is not included in the IRA owner’s income and is not taxed, preserving the full amount for charitable purposes. The Community Foundation has a variety of options for those looking to transfer their IRA assets directly to charity versus being taxed on these dollars.
Once a charitable gift is made, the generous IRA donor still faces multiple options for their gift: Support the entire community? Underwrite a special cause? Shore up a favorite charity? There are three top charitable fund you can select from through the Chautauqua Region Community Foundation.
The Community Foundation strives to meet the ever-changing needs of our community through its Community Service Funds. IRAs transferred to the Community Foundation for the Community Service Funds allows the Board to address a broad range of current and future needs. The Foundation evaluates all aspects of community well-being—arts and culture, community development, education, environment, health and human services—and awards strategic grants to select projects and programs that meet the mission. For people who care deeply about this community and its people, this fund is an excellent way to address our most pressing needs, today and tomorrow.
Another opportunity is the Foundation’s Field of Interest Grants which connects personal values to high-impact programs. IRA transfers to Field of Interest Funds allow donors to target gifts to causes important to them: Arts, education, neighborhood revitalization, youth, elderly and more. The Chautauqua Region Community Foundation awards grants to community organizations and programs addressing the donor’s specific interest area. For those who are particularly passionate about a single cause, Field of Interest Funds provide strategic, lasting support—even as needs change over time.
A third charitable option, which the Foundation offers its donors, is Designated Funds which help local organizations sustain and grow. IRA transfers to Designated Funds allow donors to support the good work of a specific nonprofit organization—a library, museum, their church or any qualifying nonprofit charitable organization. For people who want to help secure the future of their favorite charities, our endowed Designated Funds give non-profits a steady stream of income.
If you are interested in learning more about this IRA Charitable Rollover legislation and how it can help make our region a better place, contact the Chautauqua Region Community Foundation at 661-3390.