tax extenders

IRA Rollover, Anytime Soon?

Sorry, we are looking again at a resolution of the various expired tax extenders (including the IRA giving law) being taken up after the November election.  Click here for Forbes’ update on this issue but it is not anything we haven’t seen before.

Congress will most likely retroactively re-enact all or most of the so-called tax extenders in late November or December, create a little havoc with those trying to use the laws for 2014 and we’ll be back in 2016 with the same issue.  Sorry the news doesn’t provide any more clarity on the topic.  If you have donors interested in using IRA giving in lieu of their RMDs in 2014, the best advice is to hold off on withdrawing anything from your IRA until the last moment.  If the law is retroactively enacted, those who waited until the end of the year to withdraw RMDs will likely have the ability to avoid taxable RMD income with an IRA gift.  Others?  Not necessarily.






IRA Rollover Update – Almost there?

We’re getting closer to having an IRA giving option again.

The House Ways and Means Committee actually voted yesterday to permanently extend the IRA Rollover! (click here to read more about this as well as some other cool potential legislation they passed – no reason to comment yet on the rest as the likelihood of actual enactment seems too slim)

Don’t get too excited though.  The Senate is doing something completely different with tax extenders this year, which makes us wonder how and when it will all turn out (check out this article for a more indepth discussion).

We’ll see by the end of the year or even next year what happens on this.  Stay tuned.


IRA Giving – Anyone?

The tax extender-go-round is slowly churning again but the results this time are not guaranteed – particularly regarding the IRA rollover.

To get you up-to-speed quickly, the IRA giving provision has been stuck since its enactment in 2006 in the annual or bi-annual tax extender legislation.  The extender package refers to a series of tax deals (mostly for corporate breaks to encourage investment or float something “good”) that expire annually or bi-annually and must be re-upped after they expire.

Of course, why all of the suspense?  Why not just permanently pass these tax deals?  Easy answer – their costs to the U.S. Treasury are too high!

In any case, I am getting more “Tax Extender” notifications these days from my google alerts, which seems to tell me that the ball is rolling and we may have an answer for 2014 IRA giving for 70.5-year-olds and up.

But, unlike other years, here is what I am hearing.

  • Maybe Congress will just pass what they think are the most needed (actually 6 were mentioned – NONE being the IRA giving provision – click to see article!)  This is on the negative side for IRA giving.  It is bad enough that the AMT fix (formerly part of the extender-go-round) was actually permanent last time – which took a lot of pressure off Congress to get this done. Now, Congress wants to pass only the “top” 6?  Not good for the other 50+ tax deals.
  • Or, in early April, we had the Senate Finance co-chair declaring this would the last renewal for the extenders!  Read this article and get a sense that some extenders may not make the cut and be gone forever. By the way, April 3 was the last time the IRA rollover was even mentioned on my google search.

I tend to believe that the nonprofit world doesn’t have the leverage or drive to get the IRA rollover over the top and into permanent law.  If you read into the various extenders up for grabs, you will see several that look like boondoggles to me – but have an aggressive lobbying effort pushing them over the top (regardless of whether they make sense for the country).  In fact, some are nonsensical – no logical reason except that the industry (which profits from the extender) that wants them is making sure they happen.  Not so with the IRA rollover.

Am I predicting an end to IRA giving this year?  Not yet. But, the way things look right now, sooner or later the IRA rollover will be gone for good.  I hope I’m wrong but unless the nonprofit world steps up with a serious lobbying effort, its chances look slimmer and slimmer every day.

IRA Charitable Rollover Very Likely to Expire 12/31/13

Here is a Bloomberg Business Week piece discussing the high likelihood that “tax extenders” will not happen by the end of the year.  Not good news at all for the IRA Charitable Rollover provision.

In short, the article suggests that short term tax fixes (the annual tax extender merry-go-round) may be going out of fashion, which could leave us with a year or more without the IRA giving law.

My suggestion to fundraisers:  play up the expiring part of the IRA rollover in hopes of sparking interest and fear.  This fall may very well be the last time donors have this interesting giving option.

Of course, if there is enough pressure, anything can happen.