The bill, referred to as the Public Good IRA Rollover Act (S. 1366), is an amendment to the Internal Revenue Code of 1986. It allows persons 70 ½ or older to make tax-free direct gifts to charities from their IRAs, and allows persons 59 ½ or older to make “life-income” gifts to charities. According to a news report, the life-income gifts provide an income stream from those assets for the giver over a defined period.
The bill was introduced by US Senator Byron Dorgan (D-North Dakota) and cosponsored by Gordon Smith (D-Oregon), Olympia Snowe (R-Maine), John Kerry (D-Massachusetts), and Charles Schumer (D-New York), according to a news report.
The news report said Dorgan noted that charitable IRA rollovers have had strong, bipartisan support in the past. He pointed out that President Bush had allowed for individuals to make tax-free charitable IRA distributions after age 65 in his proposed fiscal 2006 budget, but that this bill differs in offering the chance to make tax-free life-income gifts.
US Representative Wally Herger (R-California) first introduced the Public Good IRA Rollover Act (H.R. 1607) in April that would allow direct tax-free charitable contributions from IRA accounts at age 59 ½ so that the giver would not have to first recognize the gift amount as income and then file for a deduction, the report noted.