(More Information about KETRA)
Recently signed into law, the Katrina Emergency Tax Relief Act of 2005 (KETRA) contains some key provisions that may benefit you as you consider making your gift to NJIT this year.
Under current law, itemized deductions for gifts of cash and certain other property are limited to 50% of your Adjusted Gross Income (AGI) each year. KETRA temporarily suspends this deductibility ceiling for any cash gift made before December 31, 2005 up to 100% of your AGI.
In addition, the provision in the IRS code that requires that itemized deductions be reduced by 3% of the amount by which AGI exceeds $145,950 for individuals and married couples ($72,975 for married persons filing separately) is also waived.
KETRA does not require that your gift go to a charity that is engaged in providing direct relief to Katrina victims. It applies only to gifts of cash, however. The Act does not apply to gifts of appreciated assets, such as stock, which are still subject to a deductibility ceiling of 30% of AGI.
Gifts to donor advised funds, supporting organizations, private foundations, and most charitable remainder trusts and certain other life income plans are specifically excluded.
On the other hand, cash gifts to charitable gift annuities appear to qualify. Gifts from IRAs and other qualified retirement plans appear to qualify as well.
So as you give thoughtful consideration to your year-end giving, consider a gift to Operation Life Ring this year because this window of opportunity for this increased tax-deduction is only available till December 31, 2005.
