Centara Connection

Public Good IRA Rollover Act of 2007

Brittany Oates, Estate Planning Attorney

Plans are under way to introduce the Public Good IRA Rollover Act of 2007 in March. The IRA Rollover bill was originally introduced in 2004 and led to the passage of a direct gifts IRA rollover up to $100,000 per year for 2006 and 2007. Thousands of IRA owners over age 70½ have already used the IRA charitable rollover to support favorite charities with a direct IRA gift. Under the bill, there will be an unlimited IRA rollover for direct gifts for IRA owners over age 70½. There also is a deferred gifts IRA rollover for IRA owners over age 59½. The deferred gifts include one or two-life gift annuities, unitrusts, annuity trusts and pooled income funds.

Over the last thirty years, IRAs have encouraged American workers to save for retirement. For many, their savings have grown substantially and today they may find themselves with more assets in their IRAs than they need to meet their retirement goals. In August, a limited IRA Charitable Rollover was signed into law. This incentive has encouraged thousands of Americans over age 70 1/2 to donate funds from IRAs to charitable organizations. Since passage into law, taxpayers donated more than $50 million through the IRA Charitable Rollover. However, this ability will expire at the end of 2007.

The Public Good IRA Rollover Act would continue to clear away complications for retirees who would otherwise have to pay taxes on IRA withdrawals and then claim a tax deduction for their donation. Older Americans, who do not itemize their tax deductions, would not lose the tax benefit provided by IRA Charitable Rollover because the bill would make it permanent. Furthermore, it would expand the incentive for donating to charities by permitting IRA owners starting at age 59 1/2 to use IRA funds to support charities without having to pay taxes. The bill would also allow Americans to contribute more money to a broader range of charities.

The "Public Good IRA Rollover Act" gives older Americans a way to give something back to society while providing much needed funding for hospitals, museums, schools, religious institutions and social service organizations in our communities.

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