IRA rollover 2010

IRA Giving Getting Closer (and Possibly Permanent!)

ppp screen shot

Thank you PPP for your announcement  – click the picture to see it.  Yes, we are inching towards an IRA giving law again but this time it looks like it will be for good (i.e. no longer up for grabs each year).

This is great news.  Sure, you have almost no time to reach your donors this year – we will be lucky if we know for sure by Friday.  But, we can get a jump on next year and beyond, and maybe get a few gifts in by year’s end.

Why I am so encouraged is that the oldest baby boomers are just starting to turn 70 in 2016 and they are prime candidates for this giving option so the fact that the law should become permanent is great news.

My planned giving boot camp students asked what are the immediate next steps (AS SOON AS IT IS SIGNED INTO LAW)?

  • Call/email anyone you know who has used the IRA giving provision in the past!
  • Email blast away!  Time sensitive headline – act by December 31 to make your tax-free IRA gifts!
  • Even if these efforts are a little late, they will certainly help for next year and beyond.
  • Start planning a post card or newsletter or more email blast or ads in your publications – anything to catch people’s attention and open their eyes to this nifty new way of giving (if they are the right age, of course!)


Charitable IRA Rollovers Set to Expire! Talk it up now.

We have known this all year long:  the 2010 tax relief act only extended the Charitable IRA Rollover provision (direct giving from IRAs for 70.5 year olds for up to $100k) until December 31, 2011.

There is no guarantee it will be extended; most likely won’t even be addressed until later into 2012.

Actually, this is good news for major gift fundraisers and planned giving programs. Don’t forget to let your donors and prospects know that their chances of using this very helpful provision are soon to end.  Deadlines are always great incentives to act – just get out the word that this opportunity is expiring (at least for now).

Here are the relevate points to remember about the Charitable IRA Rollover provision:

  • It only applies to donors who have actually reached age 70.5 (not those who are about to turn 70.5 this year – they have to wait until they reach the magic date to request the transfer!);
  • It only applies to standard IRA accounts (it technically works with Roths, too, but you should advise your donors against using Roths for this purpose);
  • It only allows eligible individuals to send $100,000 in total to qualified nonprofits in a year (if exceeded, the IRS would have to tax any gifts over the limit);
  • It DOES count against your donors’ Required Minimum Distributions (RMDs) so this is clearly a chance for individuals to avoid income taxes on not needed RMDs.
  • The IRA funds must go directly to the nonprofit (IRA custodians should have forms for this purpose);
  • Donors don’t receive a new tax deduction – rather, the fact that they are not paying income taxes on the “withdrawal” is actually better than a standard charitable deduction.  Toss in that it counts for RMD purposes, it is really a great opportunity for tax savings and significant gifts to charity.

With the President running around the country touting his Jobs thing (which happens to damages charities by messing with itemized deductions for high net income earners), and the Republicans also getting into full campaign mode (with the focus on unseating the President), I can confidently say the Charitable IRA Rollover is in serious jeopordy.  At least for 2012.

So, use or lose it (at least that is the sell fundraisers should be putting out there before the end of the year).

Clarity on 2010 IRA/RMD situations

I had such a great question emailed to me right after the Tax Relief Act passed:

Could someone who had already withdrawn their 2010 RMD (Require Minimum Distribution from their IRAs) undo it in favor a IRA charitable rollover gift?

They did give people until Jan. 31, 2011 to make their IRA charitable gifts to count for 2010 RMDs?  You would think that since the law passed with basically 10 work  days or so to react for 2010 that they might have included a mechanism for undoing 2010 RMDs to make IRA charitable gifts.  Or, maybe they would realized the futility of giving people an extra 31 days in 2011 when most had already taken their 2010 RMDs and just created an exception after the fact.

Well, the answer is officially NO.  Check out this post on PGDC:


Tax Relief Act – Charitable IRA Rollover Tossed In!

There are going to be a million comments and explanations of this new tax relief thing so I am only going to highlight those items that might impact charities and fundraisers.

Firstly, did anyone notice that we NOW have the IRA charitable rollover provision for 2010?  Retroactive.  Big deal.  And, we have exactly 10 days left this year to scour the planet for anyone age 70.5 who hasn’t already taken their IRA RMDs (IRA Required Minimum Distributions).

So, in theory, if you can let your donors who are 70 1/2 and older who haven’t take their RMDs yet (some people like to wait) know that they can avoid the taxable income of their RMDs by making a 2010 Charitable IRA rollover gift (by Jan 31, 2011).  You might get a gift or two.

Here is my short summary of that provision on my firm’s website:

Personally, I doubt anyone was still waiting for this provision in 2010 but it is worth while spreading the news in hopes of increased 2011 IRA rollover giving.

Stay tuned for some interesting estate/gift/generation skipping tax info on the new law.