The Charity Aid, Recovery and Empowerment (CARE) Act may be passed into law in 2004. Among other provisions, it would allow people who don’t itemize deductions to deduct their charitable contributions anyway. In addition, IRA charitable rollovers would be allowed.�
Under current law, you can’t make direct charitable contributions from your IRA. Instead, you must first remove money from your IRA, pay income tax, and then make your contribution. (Ironically, bequests that take effect at your death may come from your IRA without triggering income tax.)
If the CARE bill passes, you will be able to make lifetime donations from your IRA, without owing income tax. Therefore, anyone with a large IRA who wants to make a substantial charitable contribution might want to wait until next summer. By that time, you’ll probably have a good idea of what legislation is likely to pass.
