On December 17, President Barack Obama signed into law a bipartisan tax compromise package that will extend the Bush-era tax cuts. The legislation also provides for the return of the Federal Estate Tax and extends unemployment benefits, as well as a host of other provisions to prevent major tax increases in 2011. Of particular interest is the extension of legislation allowing individuals over the age of 70-1/2 to make charitable distributions -- up to $100,000 from a traditional or Roth IRA -- directly to charity. The extension is effective for 2010 and 2011.

A special provision allows interested donors to make distributions that will be treated as made in 2010 if completed by January 31, 2011. In some cases, 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. These provisions are designed to help individuals take advantage of the limited opportunity to maximize charitable giving.

“This is exciting news for the ARRL,” said ARRL Chief Development Officer Mary Hobart, K1MMH. “When the IRA charitable giving provision was first approved in 2006, the ARRL benefited from several large contributions. I hope that donors who are able will consider this opportunity to support the League in such a generous manner for 2010 and 2011.”

Hobart cited reports from The Sharpe Group -- a planned giving consultation firm based in Memphis, Tennessee -- that said that the return of the estate tax after a one year repeal is also important. “Economists had predicted that a permanent repeal of the estate tax could reduce charitable bequests by 22 to 37 percent,” the report said. “The increase in the exemption from $3.5 million applicable in 2009 to the $5 million level applicable in 2011 -- and beyond -- will exempt some additional estates from taxation. Even so, it is important to remember that approximately 98 percent of Americans were exempt from estate taxes prior to the enactment of this legislation. The return of the estate tax will provide renewed incentive for donors to consider including charitable provisions in plans made after the first of the year.”

According to The Sharpe Group, the percentage of adults with a last will and testament has fallen to an all-time low of just 35 percent, due to the tax uncertainty over the past 10 years: “Now that this uncertainty has been reduced, at least temporarily, many Americans are expected to finalize their estate planning in the new year.”

Donors contemplating a contribution in this manner should consult with their financial advisors to determine how they might benefit from this provision. For more information on charitable giving provisions as a giving option, please contact ARRL Chief Development Officer Mary Hobart, K1MMH, via e-mail or by phone at 860-594-0397.