New Law Allows Tax-Free Gift to BJC

By Dick Ice

October 2006

There is exciting news for persons older than 70 1/2 who desire to support the vital work of the Baptist Joint Committee. A recent law passed by Congress allows IRA tax-free rollovers of up to $100,000 to public charities (one can roll over a 401(k) to accomplish this) but only in the tax years 2006 and 2007. Many persons do not need or use all of their IRA funds for current or anticipated expenses. Yet they are faced with mandatory annual distributions that add to their adjusted gross income (AGI) and taxes.

A qualified charitable rollover to the BJC could fulfill part or all of this minimum distribution in 2006 and 2007. This provision could help some who already contribute the 50 percent limit of their of AGI, or persons who do not itemize. For a few, a reduced AGI might lower the amount of Social Security dollars that are taxed.

One caution — state and local income taxes differ on the treatment of IRA distributions, so please consult your tax advisor.

In 2005, a similar law passed after Katrina that allowed me to make a substantial gift to the BJC. This gift to the endowment is now producing annual income. Without the IRA rollover, this gift would have remained a part of my will for years to come. I would rather see it work for the BJC in my lifetime. Call the BJC at 202-544-4226, and we will connect you with persons who can answer any questions you may have.