2013 May Be Your Last Chance For A “Charitable IRA Rollover”

November 6, 2013

If you are age 70½ or older, you can make a direct contribution — up to $100,000 — from your IRA to a qualified charitable organization in 2013 without owing any income tax on the distribution. The non-taxable distribution is the equivalent of getting a deduction for the charitable contribution. In addition, because the distribution is not counted as income, it does not trigger any of the numerous unfavorable income-based tax provisions. This “charitable IRA rollover” can also be used to satisfy required minimum distributions.

The American Taxpayer Relief Act of 2012 (ATRA) revived this opportunity, but only for 2012 and 2013. So if you would like to make a charitable IRA rollover, consider doing so this year in case the opportunity is not extended. If you already took advantage of the ATRA provision that allowed a charitable rollover made in January 2013 to be treated for tax purposes as if it had been made December 31, 2012, you can make another $100,000 rollover this year for 2013 tax purposes.

Have questions about charitable IRA rollovers or other giving strategies? We can help you create a giving plan that will meet your charitable goals and maximize your tax savings. Contact JPS today.