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Tax-Free Gift Option for 2015

For those over age 70½, it is once again possible to make tax-favored charitable gifts from Individual Retirement Accounts.

On December 16, legislation was signed into law that extends this special opportunity for gifts completed in 2015, and makes this opportunity PERMANENT! If you have not yet withdrawn your required minimum distribution (RMD) from your IRA for 2015, a direct transfer from your IRA to charity could satisfy your RMD requirement.

Although a total of up to $100,000 can be transferred directly from IRAs to SICSA free of federal income tax, this provision can provide tax benefits regardless of the amount.

A direct transfer from your IRA to charity may be better than writing a check to charity or contributing appreciated securities. Because the direct transfer from an IRA to charity is not included in federal adjusted gross income, the transfer may result in the following:

1. Reduction of your federal income taxes even if you do not itemize deductions;
2. Reduction of the portion of your social security income subject to federal income tax; and
3. Reduction of your Ohio taxable income.

Additionally, a direct transfer of IRA funds to charity may enhance your estate planning. Your heirs may be subject to income tax on an inherited IRA. By using your IRA to meet your charitable goals, other assets can be retained for your heirs. Please talk to your tax advisor to determine how this may benefit you.

To make such gifts, it is important to distribute them directly from an IRA to one or more qualified charities. For those with check writing privileges on their accounts, this may be the most efficient way to make gifts directly from an IRA.

Thank you for your support of SICSA!

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