Thank you readers who brought to my attention something new about the Fiscal Cliff version of the Charitable IRA provision!
After being alerted and reading the Fiscal Cliff legislation more closely, we found that Congress decided this time to offer relief for donors who wanted to use the Charitable IRA provision in lieu of their Required Minimum Distributions (RMDs).
This new rule, which was not part of previous reenactments of the IRA giving law, applies as follows:
- Donors who took their RMDs after 11/30/12 to themselves;
- And, would rather have gifted those funds to charity (and not be taxed on their RMDs);
- May make contributions to qualified charities in the same amount as their RMDs (taken in December) by 2/1/13; and
- Not have to pay income tax on those 2012 RMDs (only ones taken in December)!
Obviously, your donor does not get a 2013 charitable deduction but this is a very important opportunity for those donors who were waiting (as we suggested) to take their RMDs late in the year (in case the IRA giving law was reenacted).
What Can Fundraisers Do About This Special Provision?
Any donors who you know or suspect were waiting for the IRA rollover to pass, and may have waited until December to take their RMDs, should receive a phone call, email, letter or visit from you asap.
This is a great opportunity for tax savings and a potential gift for your organization for up to $100,000.