(MONEY Magazine) – Q. Is it possible to avoid taxes if I make a charitable gift of my traditional IRA? Our church is in the middle of a building program, and I would like to make a significant contribution soon. I'm 68 years old, and I must start making withdrawals by the time I turn 70 1/2. R.D. MADISON, WIS.

A. For several years Congress has been considering a law to allow for tax-free IRA charitable rollovers, but it has yet to pass. The current law requires you to pay taxes on distributions from a traditional IRA, even if the proceeds go to a tax-exempt charity. However, if you itemize deductions, you can minimize--and may even be able to wipe out--the taxes you'll owe on your IRA withdrawal by claiming a deduction for your charitable donation. How much you can deduct will be determined by variables such as your income and the size of the gift. Consult an accountant to project how much money you can donate and fully deduct this year, suggests Natalie Choate, author of Life and Death Planning for Retirement Benefits. Repeat that strategy each year until you have donated the full amount of your IRA. If the charitable IRA rollover bill passes before that happens, you can assign the rest of the IRA to a charity at that time. Also, if you name your church as the beneficiary of the IRA and you die before the IRA is depleted, the church can receive the remainder of the money tax-free.

SHARING A HOUSE

Q. Seventeen years ago my mother and her sister purchased a house together in San Diego for $106,000. Although they both pay the mortgage, only my aunt has lived in the house. Recently the house was appraised for $360,000, and my aunt refinanced the mortgage to pay my mother for her share. How will my mother's gain be taxed? ROBERT ANTONIO SAN DIEGO

A. Your mother's taxable gain is her half of the current market value of the house minus her half of the cost basis, or $127,000, says San Diego financial planner Ted Roman. Depending on her income, she will owe up to 15% of the gain in federal taxes and up to 9.3% in California state taxes. Since she has not lived in the house, she cannot claim the $250,000 exclusion on the sale of a principal residence even though she paid half of the mortgage payments. Still, she may be able to lower the tax bite by adding to the cost basis her share of closing costs on the purchase of the home and improvements made to the property over the years.

WORTHLESS STOCK

Q. Since my WorldCom stock is virtually worthless, do I have to sell the shares to qualify for a tax loss? JIM HOGAN AMES, IOWA

A. Yes, you must sell your shares to claim a loss on your federal tax return. But first you must find a broker who will make an accommodation sale, or what is sometimes called a "junk trade." Usually a broker will handle the sale for a nominal fee of, say, $1, but won't pass along any of the sales proceeds to you, should there be any. WorldCom, which is now known as MCI, was recently selling over the counter (on the pink sheets) under the ticker symbol WCOEQ for just 7¢ a share, so chances are the proceeds wouldn't add up to much anyway.

DIVIDING IRAs

Q. I have several IRAs and would like to leave the same amount of money to each of my two adult children. How should I go about this? JAMES PARR BELLINGHAM, WASH.

A. The best way is to commingle your IRAs into one account. Find a trustee (like a bank or brokerage) that will accept all the investments intact, so you won't need to sell anything. Then divide the account into two identical IRAs, naming each child the beneficiary of one. Upon your death, the distribution schedule for each beneficiary's IRA will be based on the new owner's age.