IRA Transfers to Charity
New Law Renews IRA Transfers to Charity for 2014 – Owners Must Act by Dec. 31:
The Tax Increase Prevention Act extends the provision that allows certain IRA owners to make tax free distributions to charity. The extension applies for the 2014 tax year. This means if the law applies to you, the deadline to complete your transactions is December 31, 2014. Here are some key points about the extension:
• If you are an IRA owner age 70½ or older you have until December 31, 2014 to make a qualified charitable distribution, or QCD.
• A QCD is direct transfer of part or all of your IRA distributions to an eligible charity. You may transfer up to $100,000 per year.
• You may exclude the distributed amounts from your income. You can claim this benefit regardless of whether you itemize your deductions. If you do exclude the QCD from your income, you can’t also deduct it as a charitable contribution on Schedule A if you do itemize.
• You can count your QCDs in determining whether you meet the IRA’s required minimum distribution.
• The provision had expired at the end of 2013. The new law is retroactive for 2014. This means any eligible QCD in 2014 will qualify.
• Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.
Questions? Contact our New York office for more information. We are happy to help.
– End of Newsletter
Any accounting, business, or tax advice contained in this page is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.