Donating From an IRA
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The day after someone turns 70 1/2, he can donate up to $100,000 in what would have been taxable income from an individual retirement account without having to pay tax on that money. The recipient must be a public charity, not a private one such as a family foundation. The gift must be made directly from the IRA to the charity; it may not pass through the account holder's hands, because if it does -- even for a second -- the money will count as income. Although the donation does not count as taxable income for the year, the money can be counted toward the amount a person must withdraw each year after the age of 70 1/2 from a traditional IRA to avoid penalties.
Clothes or household items donated after Aug. 17 have to be in "good used condition" or better to be claimed as a deduction. Apparently the federal government does not want people to get a tax break for throwing out trash. One exception is for items that may be in less-than-good condition but have been appraised at $500 or more.
Starting Jan. 1, donors must keep better records -- checks, receipts, credit card statements -- for all cash donations no matter how small. That means there will no longer be write-offs for undocumented charity of $250 or less, even if given at church.
