Under the extended tax law, you can use funds from your IRA to make a lifetime charitable gift free of tax obligations if you are 70.5 or older; your gifts total $100,000 or less each year in 2008 and 2009; you transfer funds directly from an IRA or Rollover IRA; you make the gift to a qualified charity. This includes the PFA Foundation, but excludes gifts made to charitable trusts, donor advised funds, charitable gift annuities, and supporting organizations.
Prior to the law, you would have had to report any amount taken from your IRA as taxable income. You could then take a charitable deduction for the gift, but only up to 50% of your adjusted gross income. In effect, this caused some donors to pay more in income taxes than if they did not make a gift at all.
Fortunately, now these IRA gifts can continue to be accomplished simply and without tax complications. In addition you can make the gift now while you are living and able to witness the benefits of your generosity.
For example, if individuals are over the age of 70.5 years, they have three ways of making such a contribution to the foundation: 1) a cash donation; 2) appreciated securities or other assets; or 3) transfer an IRA before the end of the year to avoid paying income tax on the amount. Consult your tax advisor for the proper way to arrange the transfer.
However, this is not considered a charitable deduction. It is simply a wash. But is a convenient and easy method for anyone to help the Foundation. Contact your IRA administrator for the form necessary for the transfer of your desired gift amount.