Over 70 1/2 or Know Someone Who is? Help a Charity…

Generally distributions from traditional individual retirement accounts (“IRAs”) are subject to income tax. For example if you have a $100,000 IRA and take a $20,000 distribution you have to include that $20,000 on your Form 1040.

Until 2014 individuals over 70 1/2 could take such distributions from an IRA and distribute those funds to a qualifying charity and NOT pay income tax on those earnings when the distributions were taken from the IRA. The amount is limited to $100,000. In the example above, if the $20,000 was distributed to a qualifying charity no amount is included in the Form 1040.

Unfortunately, while Congress provided for this exception for quite a few years, this relief has not yet been extended past December 31, 2013.

You or your clients may be deciding whether to withdraw a distribution from your IRA and directly transferring such distribution to the charity and “hope” that Congress will extend the relief as it has in the past. If Congress does not extend the relief, then you would have to report the income but you will be able to get a charitable deduction subject to limits required by law.

Advice: If you want to take advantage of this charitable IRA rollover do NOT take any minimum required distributions until relief is clear or, if you do, make the distribution directly from your IRA to the charity.

GENEROSITY IS A KEY TO HAPPINESS…REACH OUT AND HELP SOMEONE TODAY