IRA Charitable Rollover Update

11:09 am Uncategorized

MoneyBills0202087 s 150x150 IRA Charitable Rollover UpdateThe new tax legislation passed in mid-December included the extension of the IRA Charitable Rollover, which allows those over the age of 70 1/2 to make a charitable donation from a traditional IRA account without the donation being counted as taxable income.  An IRA charitable rollover also counts toward the annual IRA required minimum distribution (RMD).

Since the new tax laws passed late in the year, some who made contributions before December 17 now want to undo them.  Also, some of those who took their RMD before the new tax law went into effect now want to redirect the money to charity.

However, the IRS has ruled that the law does not allow either of these options – so, no mulligan for 2010.

The rules for making an IRA charitable rollover are:

  • You must be at least 70 ½;
  • You must make the donation from a traditional IRA – Roth IRAs and other retirement plans do not qualify;
  • Donations cannot exceed $100,000 annually;
  • For 2010, you must make the donation by Jan. 31, 2011;
  • For 2011, you must make the donation between Jan. 1, 2011 and Dec. 31, 2011.

Contact our California estate planning law firm to ensure your retirement plan aligns with the new tax laws and takes advantage of the benefits of the new legislation.

Contact us today and let our Newport Beach law firm help you with all your financial planning needs.

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