CHARITABLE GIFTS FROM IRAs RESTORED

On December 17, 2010, the President signed into law the Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010.

Of significance to those who prefer to make charitable contributions from their IRA is the restoration of the IRA Charitable Rollover. The bill approves Qualified Charitable Distributions (QCD) from IRAs through December 31, 2011.

Of special significance is the fact that the Qualified Charitable Distribution transfer from the IRA also counts as all or part of the required minimum distribution..

Rules for IRA Charitable Gifts
*  Donor must be 701/2 or older.
*  Gift can be no more than $100,000 per year. However, in cases where both spouses have their  own IRAs, each may make gifts of up to $100,000 each.
*  Transfer must be directly from the IRA custodian to a qualified charitable organization.
*  Gift may be made as an unrestricted gift or for a specific purpose (i.e. scholarship fund).
*  Gift may not be made to a donor advised fund or to a supporting organization.
*  IRA charitable gifts may not be used to fund Charitable Remainder Trusts or Charitable Gift Annuities. Transfer must be an outright gift directly to the charity.
*  IRA gifts may not be used for donor benefit gifts such as purchasing a table at a gala.

Other Information
*  Be certain that the IRA custodian sends the gift directly to the charitable organization rather than to the IRA owner. Any funds sent to the IRA owner will be taxable.
*  While there is not a traditional charitable deduction, the gift amount is taken from the owner’s gross income thus reducing the taxable income for the year.

Click here for a sample letter to your IRA Custodian Rrequesting QDC from IRA.

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