Giving an IRA

Even though most people take their IRA distributions at the end of the year, they need to plan a charitable distribution ahead of time. 

The Pension Protection Act of 2006 allows persons who are at least age 70-1/2 to make a direct transfer of funds from their IRA to a charity with no tax consequences. This is great for older donors, but this direct transfer provision is set to expire on Dec. 31, 2007 so an IRA is a good asset to consider giving now.

For a direct charitable IRA transfer:

  • the donor must be age 70-1/2 or older
  • the distribution must have otherwise been includable in ordinary income
  • the gift must be made to a qualified public charity (without any limitations that would otherwise disqualify or reduce a charitable deduction), and
  • the transfer may not be made to a private foundation, a donor advised fund or a supporting organization.

This information is not intended as legal or investment advice. For advice in your particular situation, consult your lawyer or other professional advisor.