Charitable IRA Rollover provision extension ends 2011
Among the multitude of items included in the Tax Relief Act, signed into law by President Obama at the end of 2010, was an extension of the Charitable IRA Rollover provision through the end of 2011.
Here's an example of how you would take advantage of this provision:
Example: Roy has $500,000 in an IRA and would like to contribute $25,000 to Neighborhood Centers in 2011. Upon hearing of the renewed Charitable IRA Rollover opportunity, Roy directs the custodian of his IRA to transfer this amount not later than December 31, 2011 directly to Neighborhood Centers as his 2011 gift. He will not be subject to tax on the $25,000 distributed to Neighborhood Centers. (But neither will Roy deduct this amount because he won’t include it in his taxable income in the first place.)
Giving from an IRA rather than other assets may be especially appropriate if:
- you use the standard deduction rather than itemizing your deductions, OR
- you don’t need all of the minimum distribution you’re required to take from your IRA, OR
- you plan to leave money to charity from you IRA at death anyway, OR
- you would not be able to deduct all of your charitable contributions because of deduction limitations.
Certain limitations apply to these non-taxable charitable distributions from an IRA:
- The gifts can only be made during 2011 (unless the legislation is extended further).
- You must be at least 70½ years of age when the gift is transferred.
- Total gifts cannot exceed $100,000 per year, per IRA owner or beneficiary. (Husband and wife with separate IRAs could give up to $200,000 per year.)
- Gifts must be made directly from your IRA to a public charity, and cannot be made to a private foundation, a supporting organization or a donor advised fund.
- The gifts must be outright. For instance, they cannot be used to establish a charitable gift annuity or fund a charitable remainder trust.
If you would like assistance, please contact Emelda Douglas, Sr. Vice President and Chief Development Officer, 713-669-5225 or edouglas@neighborhood-centers.org
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