IRA Charitable Rollover Update
On December 17, 2010, President Obama signed into law The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 which includes a retroactive extension of the IRA Charitable Rollover for 2010 as well as an extension of the provision in 2011.
If you own an IRA and are age 70½ or older you may transfer up to $100,000 each year. A 2010 transfer qualifies for the required minimum distribution. And, because it is so late in the year, a potential 2010 benefit still exists as the bill allows for a qualified charitable distribution (QCD) rollover to be made from now through January 31, 2011 and it still apply to 2010.
The donation must be to a public charity either outright or for a specific purpose. The new law does not allow gifts to donor advised funds, supporting organizations, private foundations, charitable lead trusts or life income plans. Further, in order to have a qualified charitable distribution under these provisions, the distribution must go directly from the IRA custodian to the charity.
If you have not made your required minimum distribution, a 2010 transfer will qualify. If you already have taken your required IRA distribution, you may still find the IRA Charitable Rollover to be a convenient way to make a year-end gift. If so, you should contact your IRA custodian immediately. Electronic mail is particularly effective and below is a sample E-mail to follow:
Dear IRA Custodian,
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, effective from Jan. 1, 2010 to Dec. 31, 2011, allows for a rollover directly from an IRA to a qualified public charity. As the owner of IRA account #_________________ that is in the custody of your organization, I request that you transfer from that account the sum of $_________________ to this charity _________________ located in city _______________ with state and zip code _______________. The Treasury Tax ID Number for this charity is _________________________.
It is my intention to make a Qualified Charitable Distribution (QCD) to this charity from my IRA, which may fulfill part or all of my IRA required minimum distribution for this year.
This E-Mail authorizes for you to make this QCD gift. However, if you require any further documentation, please contact me as soon as possible.
Very truly yours,
IRA Owner
