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November Newsletter

Quotes for today: The family that perseveres in good works will surely have an abundance of blessings. Chinese Proverbs


Congress Adjourns Without Extending IRA Charitable Rollover and Estate Tax
Congress adjourned for the year without extending the IRA Charitable Rollover and estate tax, which means both tax provisions now disappear until lawmakers take further action when they return to work later this month. On the IRA Charitable Rollover, both Democratic and Republican leaders have indicated they will try to retroactively extend the provision within the first three months of 2010, although there continues to be significant disagreement between the Senate and House over how to offset the costs of any tax "extender" provisions. PPP continues to urge lawmakers to retroactively extend the IRA Charitable Rollover as soon as possible.

Exactly how Congress will address the estate tax, however, remains unclear. It is possible lawmakers will vote to reinstate the 2009 estate tax rules and make them retroactive to January 1, 2010. Republican lawmakers may also try to push for a tax rate lower than the 2009 level and insist that it last for at least two years. There is also some interest in phasing in a lower tax rate over a period of years. Source:Partnership for Philanthropic Planing, January 6 Legislative update

Before it is to Late..... Like all adults you may be putting off writing your will. It may be time to plan for the distribution of your life's work. An increasing number of individuals are turning to the Internet to accomplish this basic task. Roughly 60% of Americans do not have a will of any kind according to a 2008 survey conducted by FindLaw, a legal news Web site and directory.

Below is a summary of a recent Wall Street Journal test of Internet Will kits and comment from the WSJ review.


Company Web site Price Includes
  Suze Orman Will and Trust Kit $13.50 Financial and health-care power of attorney, will, revocable (living) trust
  LegacyWriter $35.00 Financial and medical power of attorney, living will, last will and trust
  BuildaWill $19.95 Basic will, with forms for a notary. No medical/financial power of attorney or end-of-life docs
  LegalZoom $329.00 Living trust and living will, medical power of attorney, unlimited phone or online support


Traditional IRA to Roth IRA Conversions.. I believe one of the most significant planning topics for charitable gifting will revolve around those individuals who are considering or will complete a Traditional IRA to Roth IRA conversion. In 2010 the rules allow everyone at any age to convert irrespective of their adjusted gross income which heretofore has been limited to those making $100,000 or less. Watch this 2010 newsletter for everyday strategies every advisor can use to create charitable deductions. ________________________________________________________________

Vehicle Donations Scam the Government out of Millions in Taxes..... The Treasury Inspector General for Tax Administration audit of vehicle donations found an estimated 92,037 taxpayers claimed unsubstantiated motor vehicle donations totaling $204 million in 2007. An estimated 63,972 of those taxpayers may have avoided paying approximately $17 million in taxes. Consult the IRS Downloads on my Web Site for complete instructions for donors and charities on the correct procedures for issuing tax receipts for vehicle charitable gifts.


Do You Have a Donor Advised Fund?.....I am conducting an informal survey of the characteristics, policies and procedures used by Hospitals, Medical Centers and Medical Schools who have established Donor Advised Fund programs. Simply send me an E-mail to participate in a short survey and to be added to the results list.


Noncash Giving Rose 14%...Americans make $46.8 billion in noncash gifts in 2006 according to a IRS report. The increase occurred even though the number of tax returns indicating noncash donations declined by 6 percent. The biggest share of noncash contributions consisted of corporate stock, clothing and household items. The IRS noted an August 2006 change in federal law on used clothing and household items had its intended effect as deductions declined 10.8%.


Making Your Web site Senior Friendly Tips from the National Institute on Aging....Research based guidelines that can help create web sites that work well for older adults, the fastest growing group of Internet users. Check LINK for article.


Estate Tax Regulation in Disarray....As of this writing Congress adjourned without acting on revisions to the Estate Tax regulations. In 2010 the estate tax will disappear. Americans for a Fair Tax has urged legislators to extend the Federal Estate Tax citing a loss in vital tax revenue and incentives for charitable giving. Stay tuned and watch your news on the latest in legislation which will effect your donors in may ways. Remember under the current rules the estate tax returns in 2011 at only a $1,000,000 exemption and a 55% rate.

There are five realistic and potential options for House and Senate action on the estate tax:
1. Pass a permanent extension of the $3.5 million exemption and 45% tax rate, retroactive to Jan. 1, 2010.
2.Pass a one or two year extension of the $3.5 million exemption and 45% tax rate, retroactive to Jan. 1, 2010.
3. Pass a one or two year extension of the $3.5 million exemption and 45% tax rate, effective as of the date of the introduction of the bill. This would result in a short-term repeal of the estate tax for the period from Jan. 1, 2010 to the date of the bill.
4.Fail to come to agreement, and permit the estate exemption to return on Jan. 1, 2011 to $1 million and the estate tax rate to 55%. This would result in a repeal of the estate tax for 2010, but will create a very large estate tax increase in 2011.
5. Pass a at $2 million estate tax exemption and 45% tax rate, retroactive to Jan. 1, 2010.

Source: CrescendoInteractive, GiftLaw newsletter ______________________________________________

Kudos Corner

This is a new section where I will be highlighting some gift expectancies and gift program elements I think will be helpful and informative.

Sharon Jones FAHP, VP for Development, LifePath and Good Shepherd Hospice, for receiving an outright fully paid cash gift of $1,500,000 for a capital project to build a new hospice house in Sebring, Florida. See news release and graphic.


James E. Connell and Associates is a national consulting service devoted to increasing resources for charities using the power of charitable estate and gift planning techniques.

Pinehurst office: PO Box 3335, 15 Pinewild Drive, Pinehurst, NC 28374
Phone: 910-295-6800

Northeast office: 20982 Bayside Avenue, Rock Hall, MD 21661

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