Alright, so what are we getting with the re-enacted IRA Rollover? (Assuming the President signs it into law!)

Answer: not much.  Less than two weeks for age 70.5+ donors to scramble to direct up to $100,000 from their IRAs. If they hadn’t taken their RMDs yet, they can get credit for RMDs.  But, if they already took their RMDs, too late.

Yes, fundraisers should be getting out the word (as soon as the President signs it! – that’s my advice because you can guarantee he will sign it), calling previous IRA donors or those who have expressed interest, and email blasts to spread the word.

To me, this is a very bad sign for future extensions of the IRA rollover.  Where is the extra year we usually see?  Or, the “swap-out” provision letting people swap out their RMDs with a check to your org?  Or, an extra month (January) to make IRA gifts since it is passing so close to the end of the year?  Nothing.  Just less than two weeks for charities to promote and donors to get recommendations going.

I am wondering if the cost of giving people a better opportunity to use this law was more than Congress was willing to give.  We can’t hide the fact that IRA charitable rollovers take money out of the government’s coffers and put money into charitable coffers.  And, when it comes to legislation, the cost means a lot.

Let’s hope this was just an anomaly of a lame duck President fighting with Congress or something like that.

By the way, I apologize to readers who saw my initial forwarding of Campbell and Co.’s premature announcement.  I saw it, tried to confirm (but couldn’t), and hoped they knew what they were doing.  They didn’t.

IRA Rollover is back! (Well, almost)

I don’t know how Campbell and Company knows it but they just sent the following email – so they deserve some credit! Stay tuned for my own instructions… (EMBARRASSMENT CORRECTION – APPARENTLY CAMPBELL’S PR PERSON DIDN’T CONFIRM BEFORE THEIR EMAIL WENT OUT SO STAY TUNED FOR HOPEFULLY GOOD NEWS ON THIS ONE)

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December 2014

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Breaking News: IRA Rollover Retroactive Extension
Congress has extended a tax break on charitable donations from individual donor’s retirement accounts retroactively to January 1, 2014. This provision, which expired in 2013, allows individuals 70 ½ and older to donate up to $100,000 in IRA assets to a qualified charitable organization. The IRA charitable rollover is tax-free and not included in a donor’s adjusted gross income.

This retroactive extension is important to donors, many of whom donate a portion of their IRA distribution each year. A gift to a charitable organization from an individual’s IRA can count toward the annual Required Minimum Distribution (RMD) required by the IRS. Moreover, by reducing taxable income, the provision can help donors avoid or reduce tax implications.


Tips for Donors:

  • Consult your financial advisor about your IRA and RMD.
  • If you decide to distribute a charitable gift from your IRA, ensure that your IRA’s custodian transfer it directly from the IRA to the charity.

Tips for Charitable Organizations:

  • Reach out to donors who you know were waiting to see whether this provision would be retroactively extended. Fidelity Investments says that nearly 60% of its IRA customers who are required to take RMDs have yet to withdraw the full amount for this year.
  • Consider sending out a broader e-mail about this topic to your donors as a gentle reminder that they can reach their RMD through a charitable gift from his or her IRA.

After enacting the IRA rollover tax break for 2006 and 2007, Congress has extended it three times each for two years. The provision will expire on December 31, 2014 and it is unknown whether it will be extended into the coming year.

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