Benefits to Nonprofits with the 2010 Tax Relief Act

Good news for fund raisers: the 2010 Tax Relief Act includes provisions that can ultimately help nonprofit organizations because of reinstated tax breaks. Here are three specific areas to capitalize on when targeting your database for contributions.

1)      Charitable distribution extension – Act quickly to let donors know that contributions made to your organization directly from IRA accounts are deductible on 2010 tax returns if the deduction is made by February 1, 2011. In effect, “2/1/2011 is the new 12/31/2010.”

2)      IRA rollover for charitable contributions – Expired on December 31, 2009, IRA rollover contributions are reinstated to be tax-free for donors over age 70 ½, and up to $100,000 annually. This applies retroactively to contributions made in 2010 and extends through January 31, 2011.   

3)      Two year adjustment of the estate tax – The $5 million individual exemption ($10 million for married couples) and 35 percent tax rate on the excess can increase your opportunity for memorial gifts from estates.

Other charitable giving provisions are also extended for two years, including: increased limits for contributions of capital gain real property for conservation purposes and special rules for contributions of property by S corporations.

Please let me know if you have questions about the specific provisions and how they apply to your organization. Happy New Year!