Charitable Tax Break Spreads Confusion

A new tax break that allows people 70 1/2 years and older to donate up to $100,000 tax-free from their individual retirement accounts has generated as much confusion as philanthropy, reports The New York Times.

Many financial firms, which manage the accounts, have resisted transferring funds to charities, forcing nonprofit officials to intervene and try to broker deals by explaining the new law. Furthermore, donors who withdrew the money in their own names before donating it have found that they are not eligible for the tax breaks.

Nonprofit groups have long sought IRA charitable tax breaks, and charity officials say they hope the measure, which is set to expire in two years, demonstrates its benefit and will be made permanent.

For details on how fund raisers are trying to increase giving using the tax breaks in the new law, read The Chronicle of Philanthropy’s story.

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