Katrina Emergency Tax Relief Act Provides End of Year Tax Break

Almost 2,200 Gulf Coast Evacuees Receiving Aid in Bay Area

SAN FRANCISCO, Nov. 7 /PRNewswire/ -- Seeking to assist Hurricanes Katrina and Rita evacuees now living in the Bay Area and throughout the country, the American Red Cross Bay Area (ARCBA) today reminded donors of the end-of-year tax break provided by the Katrina Emergency Tax Relief Act (KETRA). KETRA offers donors incentives for contributions made to approved charities before December 31, 2005.

"With the rising costs of hurricane relief, the daily costs of providing food, shelter and other assistance for victims of disaster in the Bay Area, and the dramatic need for increased preparedness training for Bay Area residents, we are always grateful for new donor incentives," said Greg Smith, chief public support officer for ARCBA. "KETRA gives donors the opportunity to realize the benefits of a tax-deductible contribution and at the same time proves the need for this type of legislation."

Provisions of KETRA include:
* Distributions from qualified retirement plans (QRPs) -- not just IRAs
-- can be used for charitable purposes and any penalties are waived.
* The limits for charitable deductions relative to adjusted gross income
(AGI) are increased. For cash gifts made between August 28, 2005 and
December 31, 2005 donors may adjust their AGI by 100% for income tax
purposes.
* Donations to all organizations qualifying as charities under Section
170(b) (1) (a) of the Internal Revenue Code, regardless of whether or
not the gift is designated to hurricane Katrina relief, qualify for the
AGI adjustment.
* Donors in higher AGI brackets will receive more equitable income tax
benefits when making cash contributions prior to December 31.

ARCBA encourages members of the public to consult their tax advisors to better understand how the provisions of KETRA may impact their individual situations.

All American Red Cross disaster assistance is free, made possible by the generosity of the American people. ARCBA gets no government funding and relies solely on tax-deductible gifts and other contributions from individuals and organizations to provide national disaster relief and local services including temporary housing, clothing, food, financial assistance and mental health counseling. Last year ARCBA responded to 700 disasters in the Bay Area alone.

About the American Red Cross Bay Area Chapter

Governed by volunteers and supported by community donations, your American Red Cross Bay Area helps residents in six counties prevent, prepare for and respond to disasters. With the help of 3,000 volunteers dedicated to saving lives, the Red Cross annually mobilizes relief to families affected by more than 700 disasters, trains more than 73,000 people in life-saving and preparedness skills and exchanges hundreds of emergency messages for military, war and disaster-stricken families. Call 415-427-8000 or visit http://www.bayarea-redcross.org to learn more. The Red Cross provides nearly half the nation's blood supply. Call 1-800-GIVE-LIFE (1-800-448-3543) today to schedule your lifesaving donation.