ELCA News Blog
September 8, 2006
Retired Lutherans receive new charitable giving opportunities
by Melissa Ramirez Cooper, ELCA News Service
The Pension Protection Act of 2006 can provide Lutherans aged 70.5 and older an opportunity to support ministries of the Evangelical Lutheran Church in America (ELCA) with gifts up to $100,000 a year directly from an Individual Retirement Arrangement (IRA). Under previous law, these distributions would be taxable to the IRA owner. Gifts must be made on or before Dec. 31, 2007, and transferred directly from the donor's IRA.
"From experience and phone calls we've received, we know that there are some people who have more money in their IRAs than actually needed to cover personal expenses. The IRS requires people who are 70.5 years old and older to take minimal withdrawals and, when they do that, it becomes part of their taxable income for the year. Under the Pension Protection Act of 2006, an IRA owner can satisfy the minimum distribution and not have to recognize income when making charitable gifts," said Laura Knitt, associate director for planned giving, ELCA Foundation. "This is a nice opportunity for people to use their IRAs to make gifts and see the fruits of their gifts during their lives, such as with the ELCA Fund for Leaders in Mission, which provides tuition assistance to qualified seminarians," she said. "Typically distributions of the excess assets in IRAs are made at death. This new federal law provides another option for giving."
A distribution from an IRA to benefit the ministries of the ELCA must be an outright gift distributed directly from the IRA trustee or administrator. Life income gifts such as charitable gift annuities or charitable remainder trusts are not eligible to be funded by an IRA distribution, nor are donor advised funds, said Knitt. Distributions from retirement accounts other than IRAs also are not eligible under the Pension Protection Act of 2006.
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