The Daily News

A new law went into effect that potentially will benefit local charities and those that donate to them.

President Bush signed a new federal Pension Protection Act of 2006 that creates a new option of transferring IRA assets, up to $100,000 in value, directly to charity. By doing so the money is not included in the IRA's income and most importantly, is not taxed. This preserves the donation’s full amount for charitable purposes. This allows IRA owners to share the wealth of their retirement savings by giving directly to a charity of their choosing, without first counting it as income and paying income tax.

This could be a boon to local philanthropic organizations.

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"Changes to the tax code don't often get much attention," Mike Hannaher, director of Development for the Fargo-Moorhead Area Foundation. "It's a win-win for both taxpayers and charities."

Jana Berndt of the Breckenridge Wahpeton Community Endowment Foundation said this sounds like an exciting opportunity for those not needing to take their IRS income. So many individuals when they turn 70 have to take their IRA money, Berndt said. "Some would just as soon not take it and give it to charity" because they have enough income from other sources, Berndt said.

"If this satisfies the 70 1/2 distribution law, then it's a wonderful opportunity." This would be a great help to the individual and to the charity as well, she said.

Many retirees have significant portions of assets invested in IRAs and those interested in charitable donations want to use IRA funds as all or part of their gift giving. Until now, income tax had to be paid on the IRA withdrawal, thus reducing the amount of the gift.

"For larger estates, a good portion of an IRA account goes to estate taxes and to income taxes of beneficiaries," Hannaher said. "Experts estimate heirs will receive less than 25 percent of most IRA assets that are inherited."

Donating the funds early helps both the giver and the receiver. "I think it's a great idea and a great way for people to donate to their favorite charities when they can take IRAs out without penalty," Woody Caspers, director of the North Dakota State College of Science Alumni Foundation said. Caspers sees more non-profits reaping the benefits when there are no tax disadvantages to the contributor.

He said there's potential to benefit many foundations including the one set up for NDSCS. Caspers recommended contacting an accountant or attorney if thinking about making a charitable donation with IRA funds.

While the law provides potentially significant benefits for taxpayers and charities, it is limited by the calendar in two ways. The law is limited to holders of traditional and Roth IRAs who reached 70 years or older, and it's also only available in 2006 and 2007.

"This really is a short-term offer, a retirement blue light special if you will," Hannaher said. The window of opportunity is open now, but closes Dec. 31, 2007, unless Congress extends it.

There are several charitable fund options for giving in the Twin Towns from United Way, local churches, St. Francis Healthcare Foundation, Breckenridge Wahpeton Community Endowment, NDSCS Alumni Foundation and more.

This is great news for anything the IRS classifies as a 501(C)3, non-profit, Berndt said.

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Comments

Veronica A wrote on Jun 19, 2009 10:12 AM:

" I used to go this schoool and its a very good school and I really like and miss it but i have moved on and now and a better person but I really liked that school and I hope it lasts for ever!!!!!! Class of 05-06 "




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Marie wrote on Aug 6, 2008 12:27 PM:

" Mr Smith owes the Geffres an apology? How about the Geffres apologize to the community of Hankinson. In two short years that family has torn apart a school, a community, family and friends. They have showed no respect for Hankinson. Hankinson is not their community! It's time for the Geffres to move on. "




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MARY wrote on Aug 5, 2008 11:53 AM:

" AFTER ALL IS SAID AND DONE, I THINK OUR SUPERINTENDENT JESS SMITH OWES THE GEFFRE FAMILY A PUBLIC APOLOGY FOR SOME OF HIS COMMENTS TO THE PRESS. AFTER ALL, HE VICTIMIZED THEM PUBLICLY. IT ISN'T LIKE HE'S TOO BUSY PROTECTING OUR CHILDREN! "




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Ben wrote on Jul 30, 2008 12:21 AM:

" I think he resigned because he knew that people would find out the truth if that meeting took place.....how come after all the media he hyped up to make the Geffres llok bad, did he change his mind and resign?....in my opinion he did it to save his own skin "




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Vern wrote on Jul 28, 2008 9:37 PM:

" I agree with the previous poster that this was not about the girls getting playing time. He should probably not be allowed to teach at any age level ever again. "




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Kaye wrote on Jul 27, 2008 8:33 PM:

" There is more to this than just the Geffre's complaints and Jess Smith knows it, why doesn't he just come clean about everything and all complaints there has been on Gravalin in the past three years,he has been covering up and sweeping under the rug so to speak. This isn't just about parents that didn't think their girls got to play enough. Shouldn't the first duty of his position be to protect our children. "




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