On December 17, 2010 the president signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This much-anticipated legislation features continuation of tax cuts that were scheduled to expire, extension of unemployment benefits, and other measures designed to stimulate the economy.

The portion of the law with perhaps the most immediate impact on charitable giving is the extension of the ability for those over 70 ½ to make tax favored gifts to charity directly from a traditional or Roth IRA. Unlike many of the other components of the bill, however, the IRA gift provision is only extended for gifts completed by the end of 2011.

It is important to remember that this provision only applies to gifts from Individual Retirement Accounts and NOT from 401(k) plans or other tax-favored retirement planning vehicles. Nor may gifts be made to fund gift annuities or other life income gifts that benefit the donor or be transferred to donor-advised funds, supporting organizations, and certain other entities other than charities qualified to receive gifts under section 501(c) of the Internal Revenue Code. The rules affecting previously allowed IRA gifts pursuant to the Pension Protection Act of 2006 also apply to transfers made in 2010 and 2011.

It is important to consult with your tax advisor before making a gift to First Presbyterian via a traditional or Roth IRA.