Since 2006, IRA owners age 70 1/2 and older were eligible to move up to $100,000 form their IRAs directly to qualified charities without having to pay income taxes on the money. Once again, the American Taxpayer Relief Act of 2012 extends and expands this option for 2012 and 2013. There are three categories of potential donors:
- Some individuals in 2012 made qualified charitable distributions directly from their IRA custodian to charities with the hope the law would be retroactive. These gifts are qualified retroactive to January 1, 2012.
- Individuals who did not make a qualified charitable distribution can do so during January of 2013. This is similar to 2011, when it was possible to do a qualified distribution for the prior year in January and a second qualified distribution in the remaining 11 months of the year. If an individual has not made a qualified charitable distribution in 2012, this allows them to make two gifts (up to $100,000 per gift) in 2013. One gift for tax year 2012 if made by January 31, 2013 and another gift prior to December 31, 2013.
- Many Individuals had hoped to do a qualified charitable distribution in 2012, but in December of 2012 received their IRA required minimum distribution. If these individuals transfer those funds to Purdue in January of 2013, they will not have to report the IRA distribution as income. Effectively, the December 2012 required minimum distribution is converted to a January qualified charitable distribution for tax year 2012.
You may qualify to make an IRA charitable rollover contribution if …
- You are age 70 1/2 or older by the date of the distribution
- Your gift is $100,000 or less
- You make the transfer on or before January 31, 2013 (for 2012) OR December 31, 2013 (for 2013)
- You transfer funds directly from a traditional IRA or Roth IRA payable to Purdue University . The Purdue Foundation is NOT an eligible recipient.
Consult Your Tax Advisor Today Because of the numerous changes to tax laws in 2013, everyone can expect to be affected. Consult your tax advisor on what the new tax laws will do to your bottom line and how to plan accordingly.
If you are contemplating a charitable gift under the new laws, please feel free to contact the Purdue University Office of Planned Giving by email at firstname.lastname@example.org or 765-494-2730 or 800-677-8780 with any questions you may have.