Recent Congressional decisions have made it easier to make tax-free gifts to the HLWA Legacy Program from your IRA. On October 3, 2008, the Emergency Economic Stabilization Act was signed into law, extending the IRA rollover provision through 2009.

With this extension, taxpayers 70 ½ years old or older can continue to make tax-free distributions to qualified charities from their traditional IRAs or Roth IRAs without reporting it as taxable income. In most cases, the transfer of the gift counts toward your minimum required distribution. Distributions from these two types of IRAs can be made directly to nonprofit organizations such as the HLWA. Before this law, individuals had to first report any amount taken from their IRAs as taxable income, then take a charitable deduction for the gift, and be limited to 50 percent of their adjusted gross income. The new law simplifies the process and removes the income limitation.

In prior newsletters we introduced the HLWA Legacy Program to encourage gifting of assets to the Association, taking advantage of tax law provisions that encourage such giving. One of the goals of the program is to preserve open space through the donation of land parcels. As announced in the fall newsletter, the HLWA accepted its first donated property, two undeveloped lots on the east side of the lake. The donor of the property understood our goal to preserve as much property as possible, but the donor also realized some tax benefits with the gift of the property.

In order to fulfill the HLWA goal, most people would assume donations consist only of cash or real estate. However, other options can also increase the value of your gift. Securities you have owned for more than a year can be gifted to the Association. Or the HLWA can be named as a beneficiary of a life insurance policy. Both cases can provide you with tax benefits when structured properly.

Before considering any donation, you should consult with your tax accountant. If you have any questions please call Mike Peacock (860.379.1941) or me (860.738.0167).