• Another new rule promises to make IRAs powerful tools for charitable gift planning. Taxpayers age 70 1/2 and older will be allowed to make charitable donations directly from their IRA (up to $100,000 annually) without paying tax on the distribution.
• What's more, the charitable payments satisfy the required annual distribution obligation. Be aware that the law is valid only for 2006 and 2007.
• Rules for cash donations have been modified. The old law specified that charitable gifts over $250 must be documented by the charity. Beginning in 2007, cash, check, and other monetary donations of any amount can be deducted only if substantiated by bank record or written documentation from the charity.
• Also, new rules govern donations of used clothing or household items. Now you can claim a deduction only if the items are in "good" condition. Unfortunately, the law doesn’t define what is meant by "good".