January 3rd, 2013

IRA Charitable Distributions Reinstated for 2012 & 2013 with recently signed American Taxpayer Relief Act of 2012

Please contact the Community Foundation and your professional advisor to determine how this recently signed provision to extend IRA charitable distributions may be of benefit to you.

The American Taxpayer Relief Act of 2012 (passed in the first hours of 2013) extends the IRA charitable rollover through December 31, 2013. This provision permits tax-free distributions to an eligible charity from an IRA held by someone age 70½ or older of up to $100,000 per taxpayer, per taxable year. The provision includes two transition rules to allow donors to make 2012 contributions. First, the extension allows individuals who received an IRA distribution in December 2012 to elect to count that distribution (or a portion thereof) as a 2012 IRA charitable rollover if the individual transfers the amount in cash before February 1, 2013, to an eligible charity. Additionally, the extension allows donors to make distributions directly to eligible charities before February 1, 2013, and elect to have such distributions treated as qualified charitable distributions in 2012. This change may be of particular benefit to donors who would like to take advantage of the rollover in both 2012 and 2013.