Economic Package Includes Help For Charities

NEWS RELEASE

                                                                 Contact: Fred McCarter (812) 539-4115

For Immediate Release

Economic Rescue Package Includes Help for Charities

Provision Permits Tax-free Charitable Transfers from IRAs

Lawrenceburg, Ind., October 8, 2008 – As part of the Emergency Economic Stabilization Act of 2008, the U.S. House of Representatives passed a two-year extension of Charitable IRA legislation, making it easier for Americans to give to causes they care about. The Charitable IRA provision, first enacted for 2006 and 2007, has the power to help local charities weather the current economic crisis. The extension goes through 2009.

In these financially turbulent times, millions of Americans continue to save pre-tax dollars in Individual Retirement Accounts (IRAs). Thanks to regular investments and long-term returns, an estimated $4.7 trillion is invested in IRAs. The new law allows taxpayers age 70 ½ and older to share the wealth by giving retirement savings directly to charity – bypassing income tax.

This new law is a boon to local charities that are experiencing the effects of a tough economy. The tax benefit expires December 31, 2009.

“It is a win-win situation for people who would rather give to charity than pay taxes and the non-profit organizations they choose to support,” said Fred McCarter, Executive Director of the Dearborn Community Foundation, Inc. (DCF).

Thanks to decades of deliberate saving, some of today’s retirees have more money in their IRAs than they need for daily living expenses and long-term care. Charitable individuals and couples have expressed an interest in giving the funds to charity, but income tax must be paid on all withdrawals, which reduces the value of the gift. Others are concerned about designating their children as IRA beneficiaries, since that may draw unintended tax consequences.

“For larger estates, a good portion of IRA wealth goes to estate taxes and income taxes of beneficiaries,” McCarter said. “Experts estimate heirs may receive less than 50 percent of IRA assets that pass through estates.”

A provision in the new federal law extends an option: transferring IRA assets directly to charity. By going directly to a qualified public charity such as the Dearborn Community Foundation, the money is not included in the IRA owner’s income and, most importantly, is not taxed, preserving the full amount for charitable purposes.

During 2008 and 2009 only, holders of traditional IRAs who are age 70½ or older can make direct charitable transfers up to $100,000 per year. A single person can transfer $200,000 free from federal tax; a married couple can transfer up to $400,000 free from federal tax from separate accounts. DCF can help donors execute the transfers and choose from several charitable fund options for their gift. Donor Advised Funds do not qualify for tax-free IRA transfers.

“This really is a limited-time offer: the window is open now, but it will close at the end of 2009,” McCarter said. “For anyone interested in establishing a permanent legacy in this community, this is the opportunity of a lifetime to make the gift of a lifetime.”

Contact Fred McCarter at 812-539-4115 for more information about how the Dearborn Community Foundation can help make your charitable wishes come true.