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News: Pension Protection Act

Pension Protection Act
Numerous Changes for Charitable Contribution Deductions And Charitable Organizations

The House and Senate recently passed the Pension Protection Act of 2006 (the "Act"). President Bush is expected to sign this massive tax bill into law today, August 17, 2006.

As expected, the Act includes many provisions designed to protect employee pensions. For example, the legislation makes sweeping changes to the funding rules governing defined benefit plans of private employers which are intended to ensure that companies are able to deliver on retirement security promises.

However, at least one hundred pages of the lengthy Report prepared by the Joint Committee on Taxation explaining the Act discuss charitable giving incentives and provisions designed to reform exempt organizations.

For example, the Act provides an exclusion from gross income for otherwise taxable distributions from an IRA in the case of a qualified charitable distribution made directly to a charitable organization. The exclusion is available for 2006 and 2007 and may not exceed $100,000.00 per taxpayer per taxable year. The distribution is eligible for the exclusion only if made on or after the date the IRA owner reaches the age of 70 and 1/2.

Additional articles regarding pertinent provisions of the Act will appear in the weeks ahead. If you have any questions about the Act, please do not hesitate to call Michael S. Piotrowicz at (215) 587-0134.

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