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The New Tax Law and Estate and Gift Planning Strategies

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On April 26, the University of Minnesota Retirees Association (UMRA) and the University of Minnesota Foundation (UMF) sponsored a seminar, "The New Tax Law and Estate and Gift Planning Strategies." In response to requests from retirees who were interested in the information but could not attend, we asked for a short overview of the seminar content from Lynn Praska, UMF planned giving representative. Here are notes from Lynn on the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The Act contains a provision to extend the opportunity for donors to make qualified charitable contributions from their IRAs, which expires December 31, 2011.The rules are:

Donors must be at least 70 1/2 when the gift is made.
Distributions must be from an IRA and will satisfy the donor's minimum required distribution (MRD).
Distributions must be made directly to the charity.
Allows for an exclusion from gross income of up to $100,000 per year for otherwise taxable distributions. There is no income tax deduction involved, only the exclusion from gross income.
Gifts must be made "outright" - they cannot be used for a gift annuity or charitable remainder trust.
The Act also:

Temporarily extends the 2010 ordinary income tax rates for all individual taxpayers for two years (through 2012).
Continues lower tax rates for qualified stock dividends and long-term capital gains.
Provides a temporarytwo-year$5 million estate tax exemption with a 35 percent tax on estate assets over $5 million for persons dying before January 1, 2013.
If Congress does not act before then, the $1 million exemption and 55 percent estate tax will return in 2013.
Congress also reunified the gift and estate tax systems that were separated in 2001 so that the $5 million exemption applies to both gifts given during life and those that pass to heirs at death.
Any unused exemption carries over to the surviving spouse.
Because it is difficult to condense a two-hour seminar into bullet points, you are welcome to contact Lynn Praska directly if you have any questions about the Act, or about how to support Extension with an estate gift; she can be reached at 612-624-4158 or

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