The recent passage of the American Taxpayer Relief Act of 2012 (ATRA) included a reinstatement of the IRA Charitable Rollover provision through 2013.
Since 2006, IRA owners 70 ½ and older have been able to make a qualified charitable distribution (QCD) up to $100K each year. ATRA extends and expands this option for 2012 and 2013. There are three main categories of IRA owners for whom this may provide useful:
- Individuals who made QCD's directly from their IRA custodian to charities with the hope the law would be made retroactive. These QCD's are indeed qualified retroactive to January 1, 2012.
- Individuals who did not make a QCD in 2012 can now do so in January of 2013. In other words, if you did not make a QCD in 2012, you may make two QCD's of up to $100K in 2013.
- If you were one of the many who had hoped to make a QCD in 2012, but in December received your IRA required minimum distribution (RMD), you can transfer those funds to the charity of your choice during January of 2013, and the IRA distribution will not count as income. Effectively, this allows the December RMD to be converted to a January QCD which qualifies for 2012.
As always, the Land Trust recommends you consult with your tax or investment professional to ensure your unique circumstances are considered, or if you have further questions about the provisions.