Tax Code Change Could Alter the way Taxpayers Donate Money
Although President Clinton has said he will veto the bill recently passed by Congress that contains a new tax code for charitable donations, the spirit of this provision deserves attention since it is expected to live even if the bill should die.
The provision in the Bill set before Clinton gives IRA owners, over age 70 1/2, the ability to donate all or part of their account funds to charity while they are alive. The proposed Bill also allows taxpayers to make limit-free IRA donations without the assets being included in their personal income.
The bill does not specify if the donation would be applied toward the taxpayer’s required minimum distribution.
While an IRA donation serves as a wise charitable endowment at death, says University of Missouri Law School Professor Christopher Hoyt, capital assets such as stock and land are a wise lifetime donation choice, in tax-terms anyway.