TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, January 20, 2013

Congress Extends 100k Deduction for IRA Contributions to Charity

Wall Street Journal Tax Report: IRA Donations Get a Break New Rules Reinstate Tax Treatment for Gifts to Charity:

On New Year's Day, Congress renewed the highly popular but expired individual retirement account charitable-rollover provision for people at least 70½ years old. The extension is retroactive to Jan. 1, 2012, and will be in effect until year-end, when it lapses for the fourth time in a decade.

To atone for their dawdling last year, lawmakers are allowing givers to make 2012 IRA donations this month and to recast payouts taken in December to take advantage of the retroactive extension.

Charities are cheering the renewal. ... IRA owners 70½ and older can make direct contributions of up to $100,000 of their account's assets to one or more qualified nonprofit groups. ...

[T]here are rules of thumb. Gifts of IRA assets often make sense if the donor doesn't itemize deductions, has few or no liquid assets outside the IRA, or is concerned about minimizing adjusted gross income. David Lifson, a tax specialist at Crowe Horwath in New York, says IRA donations often are appropriate for people who have large IRAs they don't anticipate using.

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