charitable IRA rollover legislation allows you to transfer lifetime
gifts up to $100,000 using funds from your individual retirement account
(IRA) without undesirable tax effects.
You may contribute funds this way if:
Q. I've already named your
organization as the beneficiary of my IRA. What are the benefits if I
make a gift now instead of after my lifetime?
A. By making a gift this year of up to $100,000 from
your IRA, you can see your philanthropic dollars at work. You are
jump-starting the legacy you would like to leave and giving yourself the
joy of watching your philanthropy take shape. Moreover, you can fulfill
any outstanding pledge you may have already made by transferring that
amount from your IRA under this legislation as long as it is $100,000 or
less for the year.
Q. I'm turning age 70½ in a few months. Can I make this gift now?
A. No. The legislation requires you to reach age 70½ by the date you make the gift.
Q. I have several retirement accounts—some are pensions and some are IRAs. Does it matter which retirement account I use?
A. Yes. Under the legislation, gifts can be made from
IRAs. Pension, profit sharing, 401(k), 403(b) and other forms of
retirement funds do not fall under this tax legislation.
Q. Can my gift be used as my minimum required distribution under the law?
A. Yes, absolutely. If you have not yet taken your
required minimum distribution, the charitable IRA rollover gift can
satisfy all or part of that requirement. Contact your IRA custodian to
complete the gift.
Q. Do I need to give my entire IRA to be eligible for the tax benefits?
A. No. You can give any amount under this provision, as
long as it is $100,000 or less this year. If your IRA is valued at more
than $100,000, you can transfer a portion of it to fund a charitable
Q. I have two charities I want to support. Can I give $100,000 from my IRA to each?
A. No. Under the law, you can give a maximum of
$100,000. For example, you can give each organization $50,000 this year
or any other combination that totals $100,000 or less. Any amount of
more than $100,000 in one year must be reported as taxable income.
Q. My spouse and I would like to give more than $100,000. How can we do that?
A. If you have a spouse (as defined by the IRS) who is
70½ or older and has an IRA, he or she can also give up to $100,000 from
his or her IRA.
Q. I am 73 years old and made a gift of less than $100,000
directly from my IRA to a qualified organization in 2012. Am I eligible
to receive the tax benefits?
A. Yes. Even though the IRA charitable rollover
legislation expired on Dec. 31, 2011, the American Taxpayer Relief Act
of 2012 permits qualified distributions from an IRA made anytime in 2012
through Jan. 31, 2013, to count in the 2012 calendar year for tax
purposes. Contact your professional tax advisor to make sure your
contribution counts for 2012.
Q. I took a distribution from my IRA on Dec. 15, 2012, and would
like to make a contribution to a qualified charitable organization. Am I
eligible to receive the tax benefits?
A. Yes. A taxpayer who took a distribution from the IRA
in December 2012 may make a contribution before Feb. 1, 2013, and treat
this as a direct transfer. Contact your professional tax advisor to
make sure your contribution counts for 2012
It is wise to consult with your tax
professionals if you are contemplating a charitable gift under the
extended law. Please feel free to contact Tim Enstice at 757-962-8213 or Legacy@peta.org with any questions you may have.
Because this legislation was enacted in January 2013, a special
transition rule allows individuals who took a distribution from their
IRA in December 2012 to make a gift to a qualified charitable
organization prior to Feb. 1, 2013, and treat that as a direct transfer.
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The information on this website is not intended as legal or tax advice. For legal
or tax advice, please consult an attorney. Figures cited in examples are for
hypothetical purposes only and are subject to change. References to estate and
income taxes apply to federal taxes only. State income/estate taxes or state
law may impact your results.
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