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Water, Land, Life
WPC enewsletter

January 2011

Take advantage of the reenacted federal tax law and help the Conservancy to conserve water, land and life in Western Pennsylvania.

A stream near the mountains.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was signed into law by President Obama on Friday, December 17, 2010.

This new law restores previously expired provisions that allow individuals to make tax-free distributions from their individual retirement plans for charitable purposes.

The law also raises the charitable deduction that donors of conservation easements can apply to their adjusted gross income and allows them to carry over unused deductions for an extended number of years.

IRA Charitable Gifts:
Thanks to reenacted tax law provisions, donors can make tax-free distributions from their individual retirement plans for charitable purposes. Individuals who are 70½ or older can make a tax-free distribution to their favorite charity – such as WPC – from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per taxable year. These contributions count toward the Required Mandatory Distribution (RMD), but do not increase taxable income.

Making a Charitable IRA Rollover Gift could benefit you if:
1. You have a large fund balance in your traditional IRA or Roth IRA.
2. You are a generous donor who itemizes on your federal income tax return.
3. You do not itemize on your federal tax return.
4. You would like to reduce your income for federal tax purposes.

WPC is required to count all charitable gifts in the year in which they are received. However, this law allows individuals to make charitable transfers through January of 2011 and treat them as if made during 2010 for tax purposes.

To take advantage of this law, contributions must be transferred directly to the designated charity from a donor’s IRA account. Interested donors can speak to their IRA custodian or retirement plan administrator and direct him or her to make a contribution from their IRA directly to the Western Pennsylvania Conservancy.

For more information on this giving opportunity – and other ways that you can create a legacy, click here.

Conservation Easements:

A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values. It allows the landowner to continue to own and use the land, as well as sell it or pass it on to heirs.

This tax incentive, which now applies to donations made in 2010 and 2011:

  • Raises the income tax deduction landowners can take for donating a conservation easement from 30% of their adjusted gross income in any year to 50%;
  • Allows farmers and ranchers to deduct up to 100% of their income; and
  • Increases the number of years over which a donor can take unused charitable deductions from 6 to 16 years.

An illustration of how this new conservation easement incentive works is below *:

Without the enhanced easement incentive, a landowner earning $50,000 a year who donated a $1 million conservation easement to WPC could take a $15,000 deduction for the year of the donation and for an additional 5 years – a total of $90,000 in tax deductions.

The enhanced easement deduction allows that landowner to deduct $25,000 for the year of the donation and then for an additional 15 years.  That’s $400,000 in deductions.  If the landowner qualifies as a farmer or rancher, they can zero out their taxes.  In that case, they could take a maximum of $800,000 in deductions for their $1 million gift.*

For more details on conservation easements, click here.

As with all charitable gifts, we encourage you to consult your financial advisor to determine if either of these opportunities is right for you.

If you have any questions about IRA rollovers, donations of conservation easements or other charitable gift opportunities, please contact us at wpc@paconserve.org or 412-288-2777.

• Source of illustration: Land Trust Alliance

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