No amount of rushing will end poverty
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Dear Mr. Berko:
I’m 72 years old and have more than $146,000 in my Individual Retirement Account (IRA). I don’t need the income from that money to manage my expenses. I have a Social Security check, a fair pension and a monthly check from an annuity owned by my deceased spouse. I live modestly and don’t really need the income that my IRA generates. So I thought about giving $100,000 of my IRA to my church, which does wonderful things helping children in Africa and South America. I know a little about tax laws because I used to be a bookkeeper for a certified public accountant until he passed away. So I need an answer about IRA donations. Do you know if Congress in 2008 still allows seniors over the age of 70½ to donate money from their IRA to charity? I’ve told my pastor that I would donate $100,000 from my IRA in 2008 for the church’s work with poor children overseas if you give me the OK. He has impressed me with the need for immediate action and says he must have the money before the end of the month. I hope you will respond quickly, as he told me they need this money more than ever. So please tell me if this charitable tax law is still valid.
D.S., Jonesboro, Ark.
Dear D.S.:
You must be a wonderful, caring and loving person. But you’re also impressionable, fictile, easily persuaded and perhaps a little callow. I’m tired of those heartrending newspaper photos of young children with cleft lips and TV documentaries of hungry little kids being hugged by a smiling white-bearded man and shocking pictures of African children missing limbs. I’m more concerned with the children in my country than those in Peru, Darfur, Somalia or a village in Haiti. So I have difficulty understanding why your pastor would travel to distant lands when there are children as needy just doorsteps away.
Though it’s a wonderful feeling to know you are helping a child thousands of miles from Jonesboro, I would rather help a child next door who may become a better U.S. citizen, and who years later could help another needy U.S. citizen. You can tell your pastor I said so. There’s too much caring needed in our country, so I’m keen on keeping more of it here. All right?
Most charities actively support renewing that law, which expired last December. It enjoys strong bipartisan support. According to CCH Inc., provider of information to the legal and accounting professions, you still can make a $100,000 qualified charitable distribution from your IRA this year to an organization eligible to receive tax-deductible contributions. And, as noted, you must be at least 70½ when the distribution is made.
The tax law to which you refer works like this: A senior 70½ or older can transfer as much as $100,000 directly from an IRA account to their charity of choice without being dive-bombed by the Internal Revenue Service for a huge tax penalty. That transfer is not counted as part of the taxpayer’s adjusted gross income but it is counted toward the taxpayer’s minimum required distribution for that taxable year. This tax law has encouraged lots of folks to make large charitable gifts in 2006 and 2007, and I’ve been told Congress will extend the law for 2009.
Your pastor seems to be more concerned about when he’s going to get your money than if you can afford to give it. So, before you decide to cut a check, I recommend you counsel with an accountant — someone not affiliated with your pastor. I understand that you’re modestly comfortable. However, a gift of $100,000 doesn’t leave much in your cupboard for comfort if you hit a bad patch of road a few years hence.
Jonesboro is a charming city where I’ve enjoyed speaking engagements, the people and a delightful ambience. But the prices of pickles, provolone, peaches, peanuts, pizza and potatoes are increasing even in Jonesboro. So are your taxes, your health insurance premiums and the cost of nursing home care. I want you to be sure there’s enough to care for you before you give care to others.
Finally, I suggest that the accountant take a peek at this church to make sure it qualifies to receive tax-deductible contributions. Also have him take a look-see at the church’s accounting records. Many overseas children’s charities are very loose with your contributions, because they’re not held to the strict reporting standards of U.S.-based charities.
As you know, too many of God’s pastors wear Rolex watches, drive big cars, wear silk suits, employ personal groomers, personal trainers and public relations staffs and live in luxurious homes. In not too few instances, those churches can be hugely profitable business ventures.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2008 Creators Syndicate, Inc.
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