A new law-the Pension Protection Act of 2006-provides a wonderful opportunity for individuals to make charitable gifts directly from their IRA accounts tax free. The amount of the charitable gift is excluded from your gross income. This might be a good option for you if you're required to take a minimum distribution from your IRA, but don't need the additional income or don't want to pay tax on it.

• You must be 70.5 years or older at the time of the gift;
• The transfers must go directly to a charity-like VPR-from your IRA;
• Charitable contributions cannot exceed $100,000 per taxpayer, per tax year of 2006 and 2007;
• Gifts must be outright to qualified charities. (This includes VPR. However, gifts to donor advised funds and support organizations are excluded, as are contributions to fund charitable remainder trusts and charitable gift annuities.)
• Gifts must be cash. Gifts of stock do not qualify.
• Distributions from employer sponsored retirement plans such as SIMPLE IRAs, 401(k)s and 403(b)s do NOT qualify.
• This IRA rollover to a charity may appeal to you if you are already giving at your 50% deduction limit, you do not itemize your deductions, or if the additional income will cause more of your Social Security income to be taxed. The Act is effective through December 31, 2007, so a couple could plan charitable gifts totaling up to $200,000 for each of the taxable years 2006 and 2007 (provided each spouse owns at least one IRA and can each make a qualified charitable distribution of $100,000 from their plans).

Should you have any questions or need additional information, please contact Joan White at 802-864-7423 ext. 330 or Email: jwhite@spectrumvt.org, or consult your tax advisor.