IRA Charitable Rollover-Reinstated

IRA Charitable Rollover-Reinstated

Wagner has benefited from generous gifts from members of the Wagner community who have taken advantage of incentives for tax-free charitable giving that the IRA Rollover provides.  The Relief Act passed on January 1, 2013 reinstates those provisions through December 2013 and includes two key transition rules:

  • Any Qualified Charitable Distribution made during January 2013 can be treated as being made on December 31, 2012. An additional gift (up to $100,000) may be made in 2013. This means a maximum of $200,000 over the two years.
  • If a DONOR took an IRA distribution during December 2012, they can make a cash gift to charity during January 2013 and treat it as a Qualified Charitable Distribution for 2012.

The law also permits any Qualified Charitable Distribution (QCD) actually made during 2012 to qualify as well. Some donors did complete QCDs during 2012 in the hope that the law would be extended and made retroactive (which it was).

The basic rules for a Qualified Charitable Distribution are:

  • The donor must be age 70 ½ on or before the date of the rollover.
  • The charity must be a public charity but not a donor-advised fund or supporting organization.
  • The distribution must be a direct IRA-to-charity transfer.
  • The entire distribution must qualify as a deductible contribution were it not for this provision.
  •  Rollovers from SEPs and SIMPLEs do not qualify.
  • The exclusion from gross income only applies to distribution amounts that would be included in gross income were it not for this provision.

Remember:    Funds must be transferred by your IRA plan administrator directly from your IRA to Wagner or another charity.

Please call Frank Young at (718) 420-4494 or Kristen Krista at (718) 420-4529, if you have questions or before making a transfer from your IRA plan, and check with your accountant or tax adviser before making any decision.