A gift named Ira.

If you are age 70½ or older, you're expected to take a required minimum distribution from your traditional Individual Retirement Account each year. The taxable sum involved is included on your tax return. If you don't need the money right away for living expenses, you can always reinvest it in your regular taxable account.

But if you are charitably inclined, there's an alternative: In 2011, those age 70½ or older can transfer up to $100,000 from their IRA directly to a qualified charity. The contribution must be made to a public, tax-exempt organization and not through a foundation or donor-advised fund.

If you can't afford to donate $100,000, you can always give less. Say you want to donate $5,000. If you give directly from your IRA to a charity, you can give the full $5,000 and count the money toward that year's required distribution. True, you won't get a tax deduction, but you also won't have to include the distribution as part of your taxable income.

By contrast, if you withdrew $5,000 as a cash distribution, you might have less than $5,000 left after taxes to donate to charity, depending on the amount of your itemized deductions. For your itemized deductions to reduce your federal taxes in 2011, they need to exceed the $11,600 standard deduction if you are married filing jointly and $5,800 if you're single.

While direct donations from an IRA can be made in 2011, it isn't clear whether Congress will allow such transfers in subsequent years. Also, you can only use distributions from an IRA. Distributions from employer-sponsored plans like 401(k), 403(b) and 457 plans don't qualify.

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

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