In case you were wondering about the IRA charitable provision….

The IRA charitable giving provision made it into the Fiscal Cliff bill!

Retroactive for 2012.  This means that if your donors want to take advantage of this law for both 2012 and 2013, they can make an IRA rollover gift for 2012 up until February 1, 2013.  In other words, if someone wants to exceed the $100,000 annual limit on their IRA giving, they can!

Stay tuned for more on the final Fiscal Cliff bill!

8 comments

  1. That is not how I read Section 208 (b) Special Rule (B) which addresses RMDs distributed in December 2012 which states that any distribution after Nov. 30, 2012 and before Jan.1, 2013 may be treated as a qualifed charitable distribution if the cash or a portion thereof is transferred to a qualified charity and would otherwise meet the 408(d)(8) requirements but for the fact it was not transferred directly to the qualified charity.

    1. Here is the Senate Version – read (2) special rules (A).

      10 SEC. 208. EXTENSION OF TAX-FREE DISTRIBUTIONS FROM
      INDIVIDUAL RETIREMENT PLANS FOR CHARITABLE PURPOSES.
      (a) IN GENERAL.—Subparagraph (F) of section 408(d)(8) is amended by striking ‘‘December 31, 2011’’
      and inserting ‘‘December 31, 2013’’.
      (b) EFFECTIVE DATE; SPECIAL RULE.—
      (1) EFFECTIVE DATE.—The amendment made by this section shall apply to distributions made in
      taxable years beginning after December 31, 2011.
      (2) SPECIAL RULES.—For purposes of subsections (a)(6), (b)(3), and (d)(8) of section 408 of
      the Internal Revenue Code of 1986, at the election of the taxpayer (at such time and in such manner
      as prescribed by the Secretary of the Treasury)—
      (A) any qualified charitable distribution made after December 31, 2012, and before February 1, 2013, shall be deemed to have been made on December 31, 2012, and (B) any portion of a distribution from an individual retirement account to the taxpayer after November 30, 2012, and before January 1, 2013, may be treated as a qualified charitable distribution to the extent that—(i) such portion is transferred in cash after the distribution to an organization described in section 408(d)(8)(B)(i) before February 1, 2013, and (ii) such portion is part of a distribution that would meet the requirements of section 408(d)(8) but for the fact that the distribution was not transferred directly to an organization described in section 408(d)(8)(B)(i).

    2. You are right and I need to get out something on this!!

      Yes, donors who took their RMDs after 11/30/12 can swap the RMD to a charity and not pay tax on it if done by 2/1/13!

  2. Wanting to be sure I convey accurate information to donors….In regard to the RMDs for 2012, I read from the Stelter Company that “a taxpayer who took a distribution from an IRA in December 2012, may make a contribution to a qualified charity before Feb. 1, 2013, and treat this as a direct transfer.” Does that speak toward the comment of how the donor may offset for 2012? So long as they took thier distribution in December, they could make a donation to charity and treat it as a direct transfer. Can you help clarify?

  3. So what if a donor instructed her IRA administrator to make direct transfers to charities in December 2012 in place of her RMD, explicitly stating that they shoudl be made so that they are qualified transfers under the old law? Sounds like she is out of luck and now needs to make them again this month to get the tax benefit and to meet her 2012 RMD requirement, right? Or should she just claim them on her income tax return as exclusions and see what happens? The rule as enacted seems to penalize those who had hoped that the rollover would be extended before year end and acted (yes, perhaps rashly and definitely at their own risk, but with true charitable intentions), but I guess it is better than nothing and there is now this year for more transfers to be made.

  4. The rule says “to the taxpayer”. The question is whether a distribution made directly to charity any time in 2012 is treated as a nontaxable transfer. I think it is.

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