Charitable IRA Rollover Extended for 2012 and 2013
For individuals 70 ½ or older
As part of the “American Taxpayer Relief Act” (HR 8) signed on January 1, 2013, a special provision extends the Charitable IRA Rollover through 12/31/2013. This legislation allows donors age 70 ½ or older to make a tax-free transfer up to $100,000 from their IRA to one or more public charities like RIC. Please see the details that follow, but most urgently, this provision allows donors to make a gift by 1/31/2013 that will qualify as a 2012 minimum distribution. Please be aware of this benefit in the event it allows you to maximize your 2013 charitable contributions. Even if you received a required minimum distribution in December 2012, you can still take advantage of this provision!
Should you have questions, want more information or assistance with taking advantage of this provision, please contact:
RIC Executive Director of Planned Giving and Major Gifts
We stand ready to assist you and we remain most grateful for anything you do for RIC.
Charitable IRA Rollover Highlights
Who might benefit from this?
- If you are 70 ½ or older, are required to take a minimum distribution from your IRA but do not need the additional income.
- If you have an outstanding pledge to RIC; Charitable IRA Rollover gifts can fulfill an outstanding pledge without triggering rules against self-dealing.
- If your IRA constitutes the largest share of your available assets.
- If your income tax rate increased in 2013, this gift allows you to use your IRA assets for charitable purposes without paying income tax on the withdrawal.
- If you will reach the charitable deduction ceiling in 2013, a Charitable IRA Rollover gift is a near-equivalent deduction because the withdrawal is not included in your taxable income.
How does this work?
- If you received a minimum distribution from your IRA in December 2012, you can make a gift of cash (up to $100,000 to a public charity) by 1/31/2013 and treat it as a qualifying rollover gift for 2012. This means the distribution will not be included in your 2012 taxable income.
- If you wish to make a gift directly from your IRA to count as a 2012 or 2013 distribution, you can authorize your IRA administrator to make the transfer directly to the public charity of your choice. We can help you do this.
Final requirements and restrictions:
- The donor must be 70 ½ or older.
- The gift must be made directly from the IRA to an eligible public charity in 2013. (The exception is for cash gifts made in lieu of all or a portion of a minimum distribution received in December 2012, which the donor now intends to use for charitable purposes.)
- Gifts cannot exceed $100,000 for each year.
- The transfer must come from an IRA, not a 401K, 403b or any other retirement plan.
- A Charitable IRA Rollover gift is not included in your taxable income nor is it eligible for a charitable deduction.
- Gifts cannot be made to a private foundation, donor-advised fund or supporting organization.
- Gifts must be outright and cannot be used to receive any material benefits in return (e.g. gift annuity, event tickets, etc.)
As with all gifts, we encourage you to consult your financial and legal advisors to learn more about how this charitable giving mechanism applies to your unique situation.