Charitable gifts from IRAs

The Pension Protection Act of 2006 was signed into law in 2006 to permit some taxpayers to make charitable gifts from their individual retirement accounts (IRAs) without adverse tax consequences. The law provides an exclusion from gross income of otherwise taxable distributions of up to $100,000 per donor per year from traditional IRAs and Roth IRAs made during 2006 and 2007 by plan owners who are at least 70½ on the date the gift is made to the charity.

As an example, if a retiree has $450,000 in an IRA and wants to give $75,000 to Portland Lutheran this year, she now can transfer that amount directly to PLS from her IRA, and she won?t be taxed on the $75,000 withdrawal. Though she cannot claim an income tax deduction for the gift, she will suffer no adverse tax consequences by supporting Portland Lutheran with a gift from her IRA.