The Internal Revenue Code currently provides a significant tax break for individuals age 70 ½ or over that expires on December 31, 2011. You can make distributions of up to $100,000 from an IRA directly to a charity and exclude the distributions from your taxable income.
Making the distribution directly form the IRA to the charity results in tax savings compared to either (1) the taxpayer making charitable gifts using other, after-tax assets, or (2) the taxpayer taking a distribution from his or her IRA and then contributing the distributed funds to a charity.
Also, because the amount distributed from the IRA to charity is not included in taxable income, it is not subject to the AGI limitations on charitable deductions.
If you are planning year-end charitable contributions you should consider whether your contribution can be completed using IRA assets.
