The Katrina Emergency Tax Relief Act of 2005 (KETRA), recently signed into law, provides special incentives for those who make charitable gifts of cash by year end. The new bill temporarily suspends the 50 percent income limitation on deductions for cash gifts made between Aug. 28, 2005 and Dec. 31, 2005 to qualified charitable organizations, including William and Mary. During this brief window of time, donors may deduct such gifts in amounts up to 100 percent of their adjusted gross income. While gifts of appreciated property such as securities or real estate are not eligible for the higher KETRA limits, these continue to be deductible up to 30 percent of adjusted gross income with the usual five-year carryforward provisions.

“These new charitable provisions may be especially important to those who have made multi-year pledges that are large relative to their income,” says Lee Walsh ’75, M.Ed. ’90, CFP, William and Mary’s director of gift planning. “Such individuals may benefit from pre-pay­ing their pledges in cash if doing so would enable them to exceed the usual 50 percent income limitation.” Walsh cautions donors to consult with their tax advisors before withdrawing funds from retirement accounts or selling ap­preciated assets specifically to take advantage of the new bill. “Advisors should be well aware of the new legisla­tion and would be in the best position to make individual recommendations to their clients.”