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breaking news-IRA Charitable Rollover Extended

Lisa Stanger - Wednesday, January 02, 2013

The last-minute fiscal cliff compromise, H.R. 8, which will also be known as the “American Taxpayer Relief Act of 2012” (or "ATRA") permanently extends the majority of tax cuts (“the so-called Bush tax cuts”) that were scheduled to expire at the end of 2012.  In addition, ATRA retroactively reinstates some rules that had expired in 2011, such as the IRA Charitable Rollover and extends the provision through the end of 2013. Thus, rollovers during calendar year 2012 of up to $100,000 directly from an IRA trustee to a charity, other than a donor advised fund, supporting organization, or private foundation, will be treated as a qualified charitable distribution.

 Because the bill was passed so late (technically after the end of 2012), ATRA provides that rollovers directly from IRAs made before  February 1, 2013 can be treated as a qualified charitable distribution for 2012. A qualified charitable distribution made in January 2013 is permitted to be (1) treated as made in 2012 calendar year and permitted to count against the 2012 $100,000 limitation on the exclusion, and (2) treated as made in the 2012 calendar year and thus permitted to be used to satisfy the taxpayer’s minimum distribution requirement for 2012. Another ATRA relief provision permits the recharacterization of any distribution made in December, 2012 that would have qualified, as a qualified rollover to a charity for the calendar year 2012 if it is subsequently transferred in cash to a charity before February 1, 2013.

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