For those of you who have an IRA, you may be interested in a recent law that was enacted, extending the IRA Charitable Rollover for 2010 and 2011. Since it was enacted so late in the year, Congress will allow individuals to make a qualified contribution for 2010 through January 2011. This law was in place for 2009, but was not reinstated for 2010 until recently. This will be a great opportunity for qualified individuals to benefit their church or other charity.
Valerie RumboughThere are some restrictions, however. The IRA owner must be at least age 70-1/2, and the transfer can be no more than $100,000 for each year. A 2010 transfer will qualify as the required minimum distribution. The transfer must be made to a public charity, and can be either for general purposes or designated to a specific cause. Contributions cannot be made, however, to a donor advised fund or a supporting organization. Also, remember to have your IRA administrator make the transfer directly to the charity. You are not allowed to take the distribution first. One of the good things about this law is that the contribution is neither counted as income for the individual, nor is it counted as a charitable contribution. That way, it does not affect your income tax return adversely.
If you have any questions regarding this, contact your IRA administrator. And for the churches and other charities out there, this is another great way to encourage your donors to make an additional contribution.
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.