New Tax Law Extends Charitable IRA Rollover for 2010 and 2011

On Dec. 17, President Barack Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Included in the package is an extension of charitable IRA rollovers. Here are some important provisions to note:

• Individuals age 70 ½ and older may once again request direct transfers of funds from Individual Retirement Accounts (IRAs) to Landmarks without income tax on gifted funds.

• The funds must be directly transferred from IRA accounts to Landmarks (donors should ask their IRA custodians for special forms to make these requests).

• Each individual is entitled to make a total of $100,000 in gifts to charities each year under this provision.

• If you have not yet taken your IRA Required Minimum Distributions (RMDs) for 2010, you may partially or wholly satisfy that requirement through an IRA rollover gift made by January 31, 2011.

• These contributions do not qualify donors for an additional charitable income tax deduction as not being taxed on the withdrawal is worth even more than a standard charitable deduction.

• Only standard IRAs and Roth IRA accounts qualify under this law; other retirement accounts such as 401(k), 403(b), SEP, KEOGH, and SIMPLE IRA plans cannot be used to make an IRA rollover gift.

• Donors of IRA rollover gifts must receive no personal benefits from this gift nor are they available for planned gifts such as charitable remainder trusts or gift annuities.

The provision is a significant opportunity for donors who:

• Hold assets in their IRAs that they do not need;
• Would like to make a large one-time gift;
• Are subject to the two-percent rule that reduces itemized deductions;
• Do not itemize; or
• Plan to leave part or all of their IRA to Landmarks at death.

For more information on how the Charitable IRA Rollover may be beneficial to you and Landmarks, please contact our Director of Gift Planning, Jack Miller, at 412-471-5808, ext. 538 or jack@phlf.org.