wfn.org | Legislation could increase church giving, foundation leader says

[NewsDesk <NewsDesk@UMCOM.UMC.ORG>]

May 28, 1999	News media contact: Joretta Purdue*(202)546-8722*Washington
10-21-71B{303}

WASHINGTON (UMNS) -- As two bills make their way through the U.S. Congress -
or languish there - a United Methodist minister and foundation executive
wants churchgoers to know the legislation could affect donations to
religious groups and other charities.

The Rev. John Crooch Jr., president of the National Association of United
Methodist Foundations, said House Bill No. 1310 "is a fairness measure,
allowing individuals who do not itemize on their federal income tax to still
get a tax advantage for charitable giving." The association is a group of
about 75 United Methodist foundations, mostly conference and area
foundations that help fund churches, institutions and other ministries in
the denomination.

The bill, which is being called the Charitable Giving Tax Relief Act, would
allow non-itemizers to deduct half of the amount in excess of $500 that they
contribute to charities over the taxable year. 

Studies have shown that non-itemizers earning less than $30,000 a year give
a higher percentage of their income to charity than people in other income
groups do, Crooch noted. This group deserves a tax break, he said. And some
organizations have estimated that the increased giving to charity could be a
couple of billion dollars a year.

Especially important to institutions like church-related colleges, camps,
shelters and soup-kitchens is House bill 1311, Crooch said. It is an
opportunity for Congress to allow donors to give an individual retirement
account (IRA) to charity without paying tax on its current value as they do
now.

This bill, called the IRA Charitable Rollover Incentive Act of 1999, would
allow people to make charitable gifts by way of a tax-free distribution from
their IRAs, he explained.

"As more and more individuals have major assets in IRAs, this provides a
very beneficial way for them, on a tax-free basis, to assist our churches
and ministries," he said.

The phenomenal growth in the stock market in recent years has resulted in
large sums on which people will have to pay taxes as they withdraw the
money, Crooch said. However, if an individual or couple put an IRA into a
charitable remainder trust, they could get income from it during their
lifetimes, and the money would pass on to a charity at death.

"Now, the IRA is the most taxable asset you have because if you try to pass
that on to family, you are going to have to pay all the income tax that has
never been paid on it," Crooch said, "plus it will be put into your estate,
and you are going to have to pay these horrendous estate taxes.

"IRAs were designed for retirement income," he added. "They were not
designed to be passed on. It's best to give other gifts to family."

Crooch explained that there is no charitable tax deduction for this kind of
gift because the money in the IRA has not had taxes paid on it.

Crooch encouraged church members to contact their representatives to support
the two bills. "It would be a great way to express interest in the causes of
our church," he declared. "There is so much need out there."

Both bills were introduced in the House of Representatives March 25 by Rep.
Philip M. Crane (R-Ill.) and referred to the House Committee on Ways and
Means.

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