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Timely Opportunities

Depreciated Securities: A Timely Charitable Gift

Are you faced with a stock loss as the year comes to an end? Assuming your overall financial situation remains sound, this may be a year where you wish to sell the stock, realizing the loss and taking your allowable deduction for tax purposes. You may then donate the cash proceeds of the stock sale to EAA, thus benefitting us and ending the year on a positive note. 

Charitable IRA: Opportunity Knocks Again

The charitable IRA legislation contained in the Emergency Economic Stabilization Act of 2008 is again in effect, enabling people aged 70½ or older to transfer distributions from their IRAs to qualified charitable organizations such as EAA. This applies to transfers made in 2011, eliminating income tax on the withdrawal. While gifts are commonly in the $5,000 to $10,000 range, there is an upper limit of $100,000 per year per IRA account.

If you or a relative meet the age requirement, give consideration to using those funds as a charitable gift to EAA. Assuming the money is not needed for personal use, this is an excellent way to satisfy the requirement for minimum distributions from your IRA while benefitting EAA. There is no income tax to be paid, although no charitable deduction can be claimed for the gift.

You may contribute IRA funds this way if:

  • You are 70½ or older
  • Your IRA gifts total $100,000 or less each year in 2011
  • You transfer funds directly from an IRA
  • You transfer the gifts outright to one or more qualified public charities

The Benefits:

  • This IRA transfer, in most cases, counts toward your minimum required distributions.
  • The gift generates neither taxable income nor a tax deduction, so even those who do not itemize their tax returns receive the benefit.
  • You may transfer up to $100,000 each year directly from your IRA in 2011.
  • The distributions may be in addition to or to fulfill any charitable giving you have already planned.

Additional Advantages:

  • While the legislation does not allow this type gift to be made directly from 401(k) or 403(b) accounts, it is generally quite easy to roll over these funds into an IRA account and then proceed with your charitable IRA gift.
  • You can simplify the gifting process by arranging for check writing privileges on your IRA account.

Your Next Steps:
Be sure to contact your professional tax advisor and/or your IRA administrator for specific guidance, particularly if you are considering a gift under the renewed IRA legislation. You are welcome to call EAA’s Planned Giving Manger, Matt Miller, at 920-426-6886 or mmiller@eaa.org with any questions.

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