Charitable IRA Gifts in 2007

ChristopherR. Hoyt has published his article, CharitableIRA Gifts in 2007, in the July/August 2007 Probate & Property.

Here is his conclusion:

An IRA owner over the age of 70 ½ shouldmake a qualified charitable distribution form an IRA if the tax savings exceedsthe administrative costs that the transaction might generate. Individuals will usually find it worth theeffort to make most of their charitable gifts from their IRAs if they do notitemize, live in a state whose state income tax laws have no charitablededuction, or otherwise benefit by keeping their AGI lower. By comparison, fora person who would receive no tax savings from the charitable IRA exclusion –typically someone who itemizes tax deductions – it may be better to receive ataxable distribution from an IRA and then make separate charitable gift,preferably with appreciated stock, mutual funds, or real estate.

The law allowing charitable IRAgifts si scheduled to expire at the end of 2007. The charities that had lobbiedto get the law enacted will push for permanency or at least an extension, butclearly 2007 is a pivotal year when IRA owners over age 70 ½ have anopportunity to make significant charitable use of some of their IRA assets.