Posted By Isaac Nuriani
Did you know that the ancient Greeks had at least six words for love? One of these, “agape,” means love for everyone. The Biblical Latin translation of “agape” is “charitas,” from which we get our word “charity,” and I believe that acts of charity do show our love for all people. And I also believe that charitable acts help everyone – the giver, the receiver and society at large. That’s why I support the 2015 America Gives More Act. This bill could change gold IRA distribution rules to allow retirees to make direct contributions to qualified charities without paying taxes. I hope you’ll join me in encouraging our U.S. Senators and President to support this bill.
According to the Colorado Nonprofit Association, the America Gives More Act would do four things:
1. Exempt direct contributions to nonprofits from seniors’ Individual Retirement Accounts (“IRA Rollover”) from taxation
2. Allows donors to deduct qualifying donations of food inventory
3. Allow donors to deduct qualifying donations of land for conservation purposes
4. Set a simple, flat tax rate for private foundations’ investment income
Except for No. 4, these have all been part of the tax code since 2006; however, they were never made permanent and expired on Jan. 1, 2015. If this bill passes the Senate and is signed by the President quickly, it will apply to 2015 and following tax years.
Leading nonprofits are eager to see this bill passed. At the beginning of December, nonprofit executives sent a letter President Obama and Congressional leadership urging them to support the bill. The signers included the leadership of Independent Sector, the Council on Foundations, Feeding America, the Land Trust Alliance and United Way Worldwide.
The House heard their plea. The bill was passed the House Thursday in a 279-136 vote, mostly breaking along party lines with Republicans in favor and Democrats against. However, even the Democrats are supportive of the bill’s proposals in principle. Apparently the Democrats’ dissenting votes are about a wider political fight over updating all the tax code.
If you have Democratic Senators, encourage them to put partisanship aside and support this bill. And if you have Republican Senators, encourage them to support the bill like House Republicans did. Find out who your Senators are and how to contact them at Opencongress.org. And consider sending a message to the White House, too.
I've included this second section to the article to give you an idea of how existing charitable IRA distribution options work. However, we can't be sure how future gold IRA distribution rules will work, so always consult your tax advisors before making financial and tax plans.
If the America Gives More Act passes, we can’t be sure yet how the gold IRA distribution rules will work. Congress might make changes to how these rules have worked in the past. For 2015 taxes, Consult with your own tax advisors to see whether you can make direct, tax-free charitable rollovers from your gold IRA, as well as the optimal amounts for your situation.
The Salvation Army put out a video a couple years ago that I think gives a good overview of how the charitable IRA rollover has worked in the past. It also explains some of the financial and tax advantages for the giver.
You can also read about the 2014 IRS rules regarding charitable IRA distributions. Unfortunately, the deadline to take advantage of tax-free charitable distributions was Dec. 31, 2014. But like the Salvation Army video above, it will give you a good idea of how the distribution rules will likely work if the 2015 America Gives More Act passes.
This isn’t part of the America Gives More Act, but another great option for charitable giving from your IRA is naming a charity as a beneficiary.
I found this excellent article on Investing Daily, “Picking IRA Beneficiaries.” The author, Bob Carlson does a good job of explaining the ins and outs, and the pluses and minuses of naming a charity as a beneficiary of your IRA and other retirement accounts. But as always, consult with your tax advisors to see what the best options are for you.
One thing Carlson does point out is that too many people don’t keep their IRA beneficiaries updated, whether the beneficiaries are family, friends or charities. That’s a mistake I see too often. It potentially leaves a legal and tax headache behind for your executors. If you haven’t updated yours, contact your plan’s representatives as soon as possible.
If you wish to take advantage of the tax-free charitable distributions from the 2015 America Gives Act (should it pass – knock on wood!), or if you wish to name a charity as beneficiary of your IRA, consult with your tax and legal advisors first. Augusta Precious Metals and I are not qualified to offer tax and legal advice about gold IRA distribution rules, and I and the company do not offer such advice. I’m just giving you food for thought and encouraging you to consider charities in your financial planning. But please, do contact your U.S. Senators and encourage them to vote yes on the 2015 America Gives More Act. And please share this post with others; this bill needs all the help we can get.
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