JFGNH BLOG

It remains to be seen whether Congress will re-enact the IRA Charitable Rollover for 2012. 

On April 26, the House Ways and Means Select Revenue Measures Subcommittee held a hearing concerning the expiring and expired tax extenders which included the IRA Charitable Rollover. Several House members testified in favor of the charitable tax extenders.

Sens. Chuck Schumer (D-NY) and Olympia Snowe (R-ME) have introduced the Public Good IRA Rollover Act of 2011 (S. 557). This legislation would make permanent and expand the IRA charitable rollover, lifting the $100,000 charitable gift limit and allowing for certain giving, like to a charitable remainder trust, to begin as early as age 59 ½.

Reps. Wally Herger (R-CA) and Earl Blumenauer (D-OR) have introduced the Public Good IRA Rollover Act (H.R. 2502) as a companion to the Senate legislation.

Whether anything is passed before the November elections still remains to be seen but it is critical it be done and that it be done early enough to allow taxpayers to take advantage of this incentive which can benefit so many charitable organizations.

Background:

Eight things to know about the IRA Charitable Rollover (as it existed before the legislation expired):

1. The distribution from an IRA  had to be made directly to the charitable organization.
2.  The "donor" had to be 70 ½ or older at the time that the distribution was made.
3. The maximum amount that could qualify was $100,000.
4. The IRA Charitable Rollover satisfied the minimum distribution requirement.
5. The amount of the IRA Charitable Rollover did not need to be reported as income on federal or Connecticut income tax returns.
6. Only distributions from traditional and Roth IRAs qualified.
7. To qualify, the distribution could only be for charitable purposes and could not be designated for a donor advised fund, supporting organization, private foundation or life-income gift (charitable trust or annuity).  No goods or services could be received in exchange for the distribution (i.e. tickets or dinner).
8. The distribution could only be to a public charity.  The distribution could be for capital needs, for an annual gift, to establish an endowment, or for any other charitable purpose. 

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