January 15, 2009 | Read Time: 1 minute
Last year, Congress passed a law allowing people age 70½ or older to donate up to $100,000 from their individual retirement accounts to charity without incurring taxes in 2008 and 2009. But some charity leaders worry that another recent law may deter such gifts because it waives a requirement for IRA holders to accept a minimum distribution from their savings — a move designed to prevent retirees from paying a tax penalty on retirement accounts decimated by declining stock values.
The American Council on Gift Annuities and the National Committee on Planned Giving are asking Congress to increase or remove the $100,000 limit and propose allowing “life-income” gifts to charity from IRA’s. Retirees could designate an amount of their savings for charity in return for a fixed amount of income. Such plans are already available for donors, but not when using IRA money.
The nonprofit associations call their plans an “all-win” scenario: Charities could see increased donations from the measure and the federal government would get to collect taxes on the income distributions paid back to donors from their gifts.
