LETTER TO THE EDITOR: Consider gifting from your IRA

To the editor:

Times are getting tough, as shown by the record number of families turning to Good Cheer Food Bank.

As Good Cheer begins its Holiday Fund Drive and continues its capital campaign, we ask local residents with IRAs who have reached the age of 70 years to consider making donations from their IRA, and especially a win-win way of gifting part or all of their mandatory IRA distributions to Good Cheer.

On Oct. 3, Congress passed, and the president signed into law, the Emergency Economic Stabilization Act of 2008 which includes a provision allowing charitable contributions direct from an IRA for persons over

70 — under the same rules that were in effect for 2007. Individuals who are required to take unneeded IRA withdrawals, and others who have experienced limitations on tax benefits in the past, will find the new law of particular interest.

Assets held in IRAs are not only subject to income tax when withdrawn during a lifetime or by survivors, but they may also be subject to estate tax if left to loved ones other than a spouse. For that reason, IRAs may be a good choice for some when deciding how to fund charitable gifts.

Under the new law, donors may choose to make charitable distributions from their IRA in any amount up to $100,000. A couple with separate IRAs could each give up to that amount.

Key provisions of the new IRA law include the following:

• Donors must be age 70 at the time the gift is made.

• Charitable gifts must be made directly from an IRA to the charity.

• Individuals can give up to $100,000 in 2008 and an additional $100,000 in 2009.

• A spouse can give an equal amount from his/her IRA.

• Donors over 70 who are required to make minimum required distributions can direct the entire amount to charity in satisfaction of their minimum distribution.

For example, say that John Smith, age 72, lives comfortably on his pension, savings and Social Security. He is required to take minimum withdrawals from his IRA and is taxed on those funds. This distribution also causes more of his Social Security income to be taxed. However, by directing part of his mandatory IRA withdrawal to charity, he avoids reporting that amount as income and does not pay taxes on those funds. He also bypasses additional tax on his Social Security benefits.

It’s easy to direct a gift from your IRA to Good Cheer. Just contact your IRA administrator or trustee to designate the direct distribution.

We believe that contributing to Good Cheer Food Bank, especially in these difficult times is the measure of a truly caring community. Whether you gift from an IRA, write a check or contribute online at www.goodcheer.org, please be generous. Thank you.

L Jay Ryan


Good Cheer

Board of Directors

Bob Olson

and Jack Hoover


Good Cheer Capital Campaign