A Hanukkah Gift: IRA Contributions to Synagogues

Not the best way to implement tax policy, but so be it.

In 2006, the passage of the Pension Protection Act allowed people 70 ½ or older to make contributions of up to $100,000 from their IRA accounts to a charitable organization without that withdrawal being treated as income. Since that time, more than $140 million has been contributed to not for profit organizations, including synagogues.

On December 3rd, the U.S. House of Representatives passed legislation that temporarily extends this law for 2014. The Senate did their thing and passed the same legislation on December 16th. President Obama signed this bill into law for 2014 last Friday.

Contributions must go directly from an IRA or Roth IRA account to the charity. Donors need the proper acknowledgement from the recipient not-for-profit – or religious – organization for their 2014 tax returns (to show that they received no goods or services in return for this gift). This is a win-win all around.

Except that from the day the president signed the bill, there were just 12 days left until this law expires once again.

So it is December 22nd and there are now only 9 days left in the calendar and tax year. What can you do?

The easiest thing is to send an email blast with the info in this blog to your congregants who fit this demographic profile. Such a contribution from the IRA accounts of congregants could be used to pay synagogue dues or annual commitments, a payment on a capital or endowment pledge, or even just a new outright gift. At this time of year, many people are still considering making end-of-year contributions. So it is still important to get the word out.

And it may be worthwhile to reach out to your Senators and Congresspeople and let them know that it would be beneficial to both individuals as well as your synagogue to make such legislation permanent in the future. At least a few more months advanced notice would be very helpful.

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