Retired Lutherans receive new charitable giving opportunities

by Melissa Ramirez Cooper, ELCA News Service

The Pension Protection Act of 2006 can provide Lutherans aged
70.5 and older an opportunity to support ministries of the
Evangelical Lutheran Church in America (ELCA) with gifts up to
$100,000 a year directly from an Individual Retirement
Arrangement (IRA). Under previous law, these distributions would
be taxable to the IRA owner. Gifts must be made on or before
Dec. 31, 2007, and transferred directly from the donor's IRA.

"From experience and phone calls we've received, we know that
there are some people who have more money in their IRAs than
actually needed to cover personal expenses. The IRS requires
people who are 70.5 years old and older to take minimal
withdrawals and, when they do that, it becomes part of their
taxable income for the year. Under the Pension Protection Act of
2006, an IRA owner can satisfy the minimum distribution and not
have to recognize income when making charitable gifts," said
Laura Knitt, associate director for planned giving, ELCA
Foundation. "This is a nice opportunity for people to use their
IRAs to make gifts and see the fruits of their gifts during their
lives, such as with the ELCA Fund for Leaders in Mission, which
provides tuition assistance to qualified seminarians," she said.
"Typically distributions of the excess assets in IRAs are made at
death. This new federal law provides another option for giving."

A distribution from an IRA to benefit the ministries of the ELCA
must be an outright gift distributed directly from the IRA
trustee or administrator. Life income gifts such as charitable
gift annuities or charitable remainder trusts are not eligible to
be funded by an IRA distribution, nor are donor advised funds,
said Knitt. Distributions from retirement accounts other than
IRAs also are not eligible under the Pension Protection Act of
2006.