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Friday, January 25, 2013

Update: IRA Charitable Rollover

The Pension Protection Act of 2006 contained several provisions for favorable tax treatment of certain charitable contributions. Most expired in 2007 only to be extended several times for two-year periods. Donors that prefer to take advantage of these provisions- including the popular IRA Charitable Rollover - have been frustrated over the years waiting to find out which ones will be extended. 

If you aren't familiar with the IRA Charitable Rollover, it allows individuals 70 1/2 or older to distribute up to $100,000 from an IRA to a qualifying charity.  While taxpayers can't claim a charitable deduction for such gifts, they don't have to count the gift as taxable income.

For those donors who like to give via the IRA Charitable Rollover, good news finally came via the American Taxpayer Relief Act. The TRA extended this provisions through 2013 (meaning that without another extension, donors are out of luck again come 2014). 
In addition, taxpayers have until the end of this month (the clock is ticking!) to make charitable distributions treated as effective in 2012. 

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1 comment:

jelly andrews said...

It is nice to know this information. Thanks for sharing this update about Charitable IRA rollover. It seems that this is a great opportunity for many individuals to maximize the benefits of their IRA contributions.