2006-10-07 / News

Community Foundation Promotes Charitable IRA

The Mackinac Island Community Foundation is joining community foundations across the United States in promoting new federal legislation that allows persons over 70 years of age to donate money in 2006 and 2007 from their individual retirement accounts (IRAs) tax-free for various charitable purposes. The 18- month program was included in the recently-passed Pension Protection Act of 2006.

Under IRA minimum distribution rules, an individual must generally begin making withdrawals by April 1 following the year in which he or she reaches age 70-1/2. As many as six million American households each year are required to take minimum distributions, and pay income tax on those distributions.

The new tax provision provides an exclusion from gross income for certain distributions of up to $100,000 from traditional IRAs which would otherwise be included in income for tax purposes. To qualify, the charitable distribution must be made to a tax-exempt organization to which deductible contributions can be made, such as a community foundation. It is available to individuals 70.5 or older.

"This is a wonderful opportunity to contribute to the Isand's future and to receive a substantial tax break for doing so," said Jennifer Bloswick, executive director of the Mackinac Island Community Foundation.

She said she can assist residents or their financial planners in determining whether they can donate under the program. The foundation's telephone number is (906) 847-3701.

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