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Monday, August 8, 2011

Proposed Bill Would Encourage Charitable Giving

Posted by Armanino Nonprofit Team

The “Public Good IRA Rollover Act of 2011″, a new bi-partisan bill that has been introduced in the U.S. Senate would have an enormous effect on charitable giving.

The current law, set to expire at the end of 2011, allows donors who are age 70 1/2 or older to roll over up to $100,000 (up to $200,000 per couple) from an individual retirement account (IRA) to certain charitable organizations without recognizing income and without taking a charitable deduction. Split interest gifts such as charitable remainder trusts, pooled income funds and charitable gift annuities are not allowed.

The new proposal would permanently allow donors to make tax-free charitable gifts from their individual retirement accounts to charity; it would lift the lifetime cap and allow split-interest gifts to begin at age 59 1/2. This bill would encourage philanthropy for people with IRAs. Non-profits, many which have experienced losses and fears of program closures due to budget cuts in recent years, would see substantial increases in charitable giving in 2012.

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