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PERMANENT IRA CHARITABLE ROLLOVER SIGNED INTO LAW

December 24, 2015
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PERMANENT IRA CHARITABLE ROLLOVER SIGNED INTO LAW

On December 18, Congress signed a law which permanently amends the tax code to incentivize charitable giving. The bill makes permanent the IRA Charitable Rollover, or the ability of an individual over the age of 70 ½ to make direct gifts of up to $100,000/year to charity from his/her IRA without having to take such amount into taxable income.

This provision no longer has an expiration date and applies to distributions made in taxable years beginning after December 31, 2014.* Donors have until the end of the calendar year 2015 to make such a contribution for the 2015 tax year.

Here are the details of the legislation:

  • A donation to a qualified charity can be used to satisfy any IRA required minimum distributions (RMDs) for the year.
  • The amount excluded from gross income is not deductible.
  • Donations from an inherited IRA are eligible if the beneficiary is at least age 70 ½.
  • Donations from a Roth IRA are eligible.
  • Donations from an active SEP or SIMPLE IRA are not eligible.
  • Donations from Qualified Retirement Plans are not eligible.
  • Married individuals filing a joint return may exclude up to $100,000 donated from each spouse’s own IRA ($200,000 total).

Additional information is available on the IRS website.

If you have any questions, please don’t hesitate to contact your Russell Capital advisor at 859.254.5225.

*this provision had expired at the end of 2014.