We're pleased to share with you some new tools to help community foundations engage donors and professional advisors in making charitable gifts to coincide with a Roth IRA conversion. As many of you know already, before 2010, only taxpayers with income below $100,000 were allowed to convert their traditional IRAs into Roth IRAs, but in 2010, Roth IRA conversion is available to all taxpayers, regardless of income level. With help from their tax advisors, many high-income individuals will be considering this option for the first time.
With Roth IRA conversion comes important tax consequences. The value of each converted IRA is added to the fund-holder's adjusted gross income, and some may find they have a large tax liability. One way community foundations can help tax advisors with Roth IRA conversion tax consequences is to suggest offsetting high-income years with strategic tax deductions, specifically charitable gifts.
Feel free to personalize any of the materials for your community foundation.