On October 3, 2008, Congress passed and the President signed into law the Emergency Economic Stabilization Act of 2008.  The passage of the law included an extension of the charitable IRA rollover provisions that expired at the end of 2007.  The bill makes no changes in the provisions of the IRA Rollover gift provisions originally included in the Pension Protection Act of 2006.  It simply revises the 2006 provision to make it apply to gifts made in 2008 and 2009 retroactive to January 1, 2008.

The extended legislation may affect decisions you make regarding your mandatory IRA distributions. This provision allows qualified individuals to make a tax-free contribution of up to $100,000 for the year 2009.  Listed below are some basic guidelines:

• You must be aged 70 ½ or older;
• The contribution must go directly from your IRA to a qualified charitable organization (donor-advised funds, charitable trusts or supporting organizations are excluded);
• The transfer generates neither taxable income nor a tax deduction, so those who do not itemize still benefit.

Individuals who are required to take the mandatory IRA withdrawals – but who do not necessarily need the proceeds – and those who have experienced limitations on tax benefits in the past, will find this law of particular interest.

This extension applies to distributions made throughout the 2009 tax year and must be made by December 31, 2009. You must act quickly if you wish to take advantage of these benefits by year’s end.  As always, check with your professional advisor about the best ways to take advantage of this new giving opportunity.