Charitable IRA Rollover opportunity ends Dec 31!
The Tax Relief Act of 2010 extended the popular IRA charitable rollover to transfers to charity, through December 31, 2011.In 2011 individuals 70½ and older can make gifts from an IRA to qualified public charities, and not be taxed on the withdrawal. The funds must be directly transferred from IRA accounts to the charities (ask your IRA custodian for special forms).
You won’t get an income tax deduction for the donation and this benefit only applies to IRAs and Roth IRAs. But it’s an efficient way to give or to pay off outstanding pledges. For example, if you transfer an IRA gift of $10,000 directly to your favorite charities you would pay no tax on the transfer. If you instead had taken the $10,000 as a required minimum distribution, at a 35% tax rate, you’d only have $6,500 left to give to charities. The direct transfer saves you taxes!
Requirements:
- You must be age 70½ or older at the time of the gift.
- Charitable distributions must be made from either traditional or Roth IRAs. Gifts from other Qualified Plans (401k, 403b, SEP, Keogh) are not eligible.
- Qualified distributions cannot exceed $100,000 per individual.
- Gifts must be outright. Distributions cannot be made to a donor-advised fund or supporting organization or to fund a charitable life-income agreement.
- The distribution is excluded from taxable income and may be used to meet all or part of the required minimum distribution.
How to make the transfer:
Contact your IRA custodian for directions on how to make the transfer. And please contact Margaret Ritchie about your gift or for assistance in the transfer.
This information is not meant as financial or legal advice. As always, consult with your attorney or tax advisor to see if this option is right for you.