IRA Charitable Rollover Provisions Revived


The American Taxpayer Relief Act of 2012, signed into law on January 2, 2013, revives the IRA charitable rollover provisions which originally expired in 2011. The revived IRA charitable rollover allows an individual who is 70½ or older to make a tax-free distribution from his or her IRA directly to a charity through December 31, 2013. Such a distribution will not be included in the individual’s income, and is not subject to the charitable giving limit of 50% of adjusted gross income.

The new law provides an additional, time sensitive opportunity. Any individual who is 70½ or older who received an IRA distribution in December 2012 may donate up to $100,000 of that distribution to a charity and treat the donation as a charitable rollover in 2012. In order to get this benefit, however, the donation must be made before January 31, 2013. Such a donation allows retroactive tax planning by removing such distributions from the individual’s income in 2012.

Any individual who is 70½ or older and who received an IRA distribution in December 2012 is encouraged to contact his or her tax advisor before the end of January to discuss whether these provisions provide a tax benefit. For more information about the American Taxpayer Relief Act of 2012 and how the new laws may affect your gifting plan or estate plan, please contact any member of the Trust & Estates Group at Partridge Snow & Hahn LLP.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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