Disclaimer: This document is only an example of one used in a church. Each church is different and should seek its own tax and legal counsel as to the exact wording desired. This sample is not intended to be tax advice. The provider makes no guarantees or promises as to the accuracy of this document.

November 7, 2005

Dear Church Family,

I would like to call your attention to recent legislation that provides for you an unprecedented opportunity to make gifts to the Lord’s work, especially your church, in 2005. On September 23, 2005, President Bush signed into law a new tax bill that provides a window of opportunity for making charitable contributions and receiving a 100% deduction. And, if you are age 59½ or older and have accumulated a large balance in a retirement account, there exists a unique opportunity to gift the Lord’s work through the church by making a withdrawal for a donation and receive a 100% deduction for the gift. Both of these opportunities exist for donations made between August 28 and December 31, 2005. Some of the temporary opportunities resulting from this legislation are summarized as follows:

1.  LIMIT: The limit on qualified tax deductions for charitable contributions has been raised to 100% of adjusted gross income for 2005 for contributions made between August 28 and December 31, 2005

2.  RETIREMENT ACCOUNTS: A unique opportunity permitted by this legislation allows individuals age 59½ or older to make charitable contributions from retirement accounts. It is important to note that these withdrawals from retirement accounts will be considered as income and yet they are fully tax deductible. This could make a contribution with pre-tax dollars from a retirement account more advantageous than doing so with other securities. You can:

a.  Withdraw IRA, 401(k), and 403(b) account funds, donate to the church, and receive a 100% charitable gift deduction

b.  There is no dollar limit on the withdrawal and gift amount. The charitable deduction is deductible up to the amount of the donor’s adjusted gross income.

c.  It is important to note that a retirement account withdrawal will still be subject to the 10% early withdrawal penalty if the donor is less than age 59½

3.  STOCK: If you would like to make a gift of stock, you may want to sell securities that have declined in value while you have owned them, deduct the losses to the extent possible, and use the proceeds to make gifts that would be exempt from the 50% of adjusted gross income limit. Or, you may sell appreciated securities, report the capital gain portion as part of the adjusted gross income, and donate all or part of the cash proceeds. The result could be to offset the gain from the sale as well as other income that would otherwise be taxable.

There are other potential benefits made available through this new tax bill attractive to both the giver and the church. See the second page of this letter for additional information on this special opportunity for making charitable gifts. This information should not be considered to be tax advice. Your financial and tax advisor should be able to help answer your questions about this rare yet limited time opportunity to creatively give to the Lord’s work through the church. You may also view additional information at www.abchurch.org/taxact2005, and make your gifts online using eGive.

With warmest regards,

John Q. Church

Church Administrator