The New Tax Law and Its Impact on Giving

December 22, 2010

The new tax law clears the way for people like you to support the Columban missions when planning your charitable giving.

President Barack Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 into law on December 17th, 2010.

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The new law extends previous tax cuts and provides for the return of the Federal Estate Tax.

I. IRA Rollover

Donors over the age of 70 ½ years young can still make charitable distributions of up to $100,000 from a traditional or Roth IRA directly to charities like the Columban Fathers. The extension is effective for 2010 and 2011.

There are some serious tax benefits available as you file your 2010 tax return, but only if you distribute funds from your IRA before January 31, 2011. A special provision extends opportunities to interested donors to make distributions that will be treated as if made in 2010 providing they are completed by that date. This means that couples could direct IRA gifts up to $400,000 between now and the end of 2011 by fully utilizing both their 2010 and 2011 extensions.

II. Estate Tax Changes

Also of importance for donors of above average means is the return of the estate tax after a one-year repeal. The return of the estate tax is a good reason for our donors to consider including provisions for the Columban missions in plans made after the first of the year.

III. More Estate Planning

Recent reports indicate that the percentage of adults with a last will and testament has fallen to an all-time low of just 35 percent. Many believe this all-time low is a direct result of tax uncertainty over the past ten years.

Now many donors can leap into estate planning in the current year with more confidence because the uncertainty about estate planning has been reduced, at least temporarily.

Great opportunities await those who, until now, have put off writing or updating their wills and testaments!