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Tax-Free IRA Gift Transfers End on December 31, Act Now
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Red Cross
October 18, 2007

If you could increase your gifts to the American Red Cross by one-third or one-half, and not have it cost you a nickel, would you do it?

IRA Rollover Letter Template

The Pension Protection Act of 2006 provides that donors over age 70 can instruct IRA trustees to make transfers to organizations they support without incurring taxable income on those amounts. Up to $100,000 can be given in this manner through December 31, 2019. No income tax deductions are available for IRA gifts, but IRA donors can still save significant taxes.

Gift Ideas with Your IRA

  • Increase Your Annual Giving. IRA funds are heavily taxed whenever you or your heirs draw them out, at rates as high as 35%. Through 2007, however, you can divert the tax collector’s levy on your IRA to the American Red Cross.

    Example: Suppose you normally send the Red Cross a check for $1,000 every year. Instead of writing a check, you could instruct your IRA trustee to send us $1,333. If you had withdrawn $1,333 from your account, the tax would have been $333 (assuming you are in a 25% tax bracket.) That $333 now can be used to support our programs – and you will have increased your giving by one-third, all paid for by the IRS.

  • Major Gifts. Marie has planned to leave the American Red Cross most of her IRA at her death, but confides she would prefer to see her gift at work now, during her lifetime. Under the old law, removing money from her IRA for charitable contribution purposes might not have been fully deductible and presented other adverse tax consequences. Now Marie plans to direct a $100,000 gift to the Red Cross from her IRA in 2007.

  • Annual Distribution Gifts. Many people who are past age 70 find they have no need for their required annual IRA payments. Charles, for example, must withdraw at least $20,000 from his IRA this year, even though he doesn’t need the money for living expenses. If Charles wishes, he can transfer the $20,000 to the Red Cross instead of taking any distributions and reduce his federal taxes by $5,600 in his 28% tax bracket.

To make an IRA contribution, simply contact your IRA trustee or custodian and notify our Office of Planned Giving of your plans. We will need to be in contact with your IRA administrator to ensure proper transfer and receipting of your gift.

If you would like more detailed information on any of the topics discussed, visit our website, www.redcrosslegacy.org or contact us by email at Plndgiving@usa.redcross.org.

The American Red Cross helps people prevent, prepare for and respond to emergencies. Last year, almost a million volunteers and 35,000 employees helped victims of almost 75,000 disasters; taught lifesaving skills to millions; and helped U.S. service members separated from their families stay connected. Almost 4 million people gave blood through the Red Cross, the largest supplier of blood and blood products in the United States. The American Red Cross is part of the International Red Cross and Red Crescent Movement. An average of 91 cents of every dollar the Red Cross spends is invested in humanitarian services and programs. The Red Cross is not a government agency; it relies on donations of time, money, and blood to do its work.

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