You can contribute funds from your individual retirement account to the Temple and gain the benefit of having your gift entirely excluded from your taxable income. This is better than having a charitable deduction that you may not be able to utilize.
As extended by Congress, the “qualified charitable distribution,” also known as the “IRA charitable rollover,” will now expire December 31, 2011.Because this is the last year for the program and because the cap is $100,000, members may want to pre-give their dues several years in advance to take advantage of this special benefit.
Here’s why this provision is so helpful: In the past, if funds were distributed from your IRA and then given to a charity, you were required to include the IRA distribution amount in your taxable income. The amount contributed to the charitable organization was deductible on Schedule A, but the deduction very rarely equaled the taxable income due to the limits on total Schedule A deductions. Therefore, under our old provisions, the taxable income created was not offset 100% by the charitable deduction. These new provisions eliminate the taxation and deduction, allowing all of the IRA distribution given to charity to be free of income tax.
To qualify, the taxpayer/donor must be at least 70½ years of age; the transfer of funds must be made directly to the charitable organization by the IRA trustee (this means that the taxpayer must never receive the funds); and a qualified charitable distribution can be counted as all or a portion of the required minimum distribution of the taxpayer.
Previously, the only way to pass funds from your IRA to a charity without incurring an income tax was to name the charity a beneficiary of your IRA. Consequently, the charity only received the gift at the time of your death. Under the new provisions, funds can be distributed during your lifetime to the charity without taxation. This allows you to enjoy and participate in the charitable activities that are made possible by your generosity.