Charitable IRA Rollover - Keeps On Rolling Through 2013

At the last moment, Congress passed legislation to avoid the fiscal cliff. This legislation, known as the Taxpayer Relief Act of 2012, included a two-year retroactive extension of the charitable IRA rollover. The previous authorization of the Rollover expired at the end of 2011, but it has now been reinstated through December 31, 2013. This extension applies to any distribution up to $100,000 made directly from an IRA to charity by an individual who is 70 1/2 or older.

What are the requirements and restrictions for making a charitable IRA rollover gift?

The donor must be 70 1/2 or older.
The gift must be made directly from the IRA to an eligible charitable organization in 2013.
Gifts to all charities combined cannot exceed a total of $100,000 for the year.
The gifts must be outright, and no material benefits can be received in return for the gift. Thus, a transfer for a gift annuity, charitable remainder trust, or pooled income fund is not permitted.
Gifts cannot be made to a donor-advised fund, supporting organization, or private foundation.
The gift is not included in taxable income and no charitable deduction is allowed.
The gift can only be made from an IRA. Gifts from a 401(k), 403(b), and 457 plans are not permitted.

Is this the right gift for you to make? Yes, if:

You want to make a charitable gift and your IRA constitutes the largest share of your available assets.
You are required to take a minimum distribution from your IRA, but you do not need additional income.
You do not itemize your deductions. The IRA transfer will not be included in your taxable income even if you do not itemize other deductions.
You live in a state where retirement plan distributions are taxable on your state income tax return, but a charitable deduction would not be allowed.
You would like to make an additional charitable gift, but it would not be deductible because of the annual 50-percent-of-adjusted-gross-income limitation on charitable contributions. The charitable IRA rollover is equivalent to a deduction because it is not included in taxable income.
You have an outstanding pledge to a charity. The charitable IRA rollover can satisfy a pledge without violating rules against self-dealing.

What steps should you take to make a gift?

If you want to make a qualifying 2013 transfer, contact your IRA administrator and instruct that person to transfer funds to the charity(ies) you designate.
Contact our office. We will answer your questions and provide instructions for completing your gift.

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