By Rose S. Prinzi

In these financially turbulent times, millions of Americans continue to save pre-tax dollars in individual retirement accounts (IRAs). Thanks to regular investments and long-term returns, an estimated $4.7 trillion is invested in IRAs. As part of the Emergency Economic Stabilization Act of 2008, the U.S. House of Representatives passed an extension of Charitable IRA legislation, making it easier for Americans to give to causes they care about. The new law allows taxpayers 70 ½ and older to contribute to a charity of their choice by transferring an IRA savings account directly to charity and by-passing income tax. 
The Charitable IRA provision, first enacted for 2006 and 2007, has the power to help local charities weather the current economic crisis. This new law is a boom to local charities that are experiencing the effects of a tough economy. The tax benefit expires December 31, 2009.

“It is a win-win—for people who would rather give to charity than pay taxes and the nonprofit organizations they choose to support,” said Randall Sweeney, Chautauqua Region Community Foundation’s Executive Director.

Thanks to decades of diligent saving, retired individuals and couples who have an interest in giving to charity, now can.  They do not have to be concerned about income tax being paid on withdrawals, which reduces the value of the gift or being concerned about designating their children as IRA beneficiaries, which may draw unintended tax consequences to them.

A provision in the new federal law extends an option: transferring IRA assets directly to charity. By going directly to a qualified public charity such as the Community Foundation, the money is not included in the IRA owner’s income and—most important—is not taxed, preserving the full amount for charitable purposes. During the remainder of 2009, holders of traditional IRAs who are at least 70½ years old can make direct charitable transfers up to $100,000 per year. The Chautauqua Region Community Foundation can help donors choose from several charitable fund options for their gift. Donor Advised Funds do not qualify for tax-free IRA transfers. One should contact their financial advisor to execute the transfer.

“This really is a limited-time offer: the window is open now, but it will close at the end of this year,” said Sweeney. “For anyone interested in establishing a permanent legacy in this community, this is the opportunity of a lifetime to make a gift that will effect generations to come. Very simply, an IRA charitable rollover assists nonprofit organizations like the Foundation to continue to support the community at the same time, lowers the taxes of the donor.”

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.