2010 IRA Gifts Tax Free Until Jan 31, also Available 2011

1/12/10

To all friends and alumnae of Wilson:

By now you may be aware that the recent tax law passed by Congress and signed by the President has reinstated the provision permitting gifts to charities, be tax free, up to $100,000 from individual IRA accounts for each of the years 2010 and 2011. Further, because of the late December passage of the law, congress is allowing gifts made on or before Jan. 31, 2011 count in the year 2010, if the letter to your IRA administrator expresses that intent.

Here are a few things to bear in mind:

The required minimum distributions from IRAs once one turns 70 1/2 years of age are fully taxed by the federal government and by states as ordinary income. Through this tax provision however, one can gift up to $100,000, even if you have taken the required distribution for 2010, making the gifts tax free. If you haven't taken your Required Minimum Distribution, these gifts can count toward that.

For some donors, IRAs will be double-taxed in their estates. They are taxed first at death at the applicable rate (now 35 percent) and taxed again as ordinary income when the beneficiaries take distributions. With the new tax provision, one can reduce, tax free, the amounts held in IRAs, which will reduce tax burdens in future years and at death – and enable you to help Wilson and other charities at the same time.

This is NOT TAX OR LEGAL ADVICE, just a notice of current changes. If you would like to speak with someone at Wilson about this, please call Jeff Zufelt, vice president for college advancement at 717-262-2010. You should always check with your financial planner or legal adviser before making decisions of this type.

Thank you in advance for your support of Wilson College and happy New Year!