As we quickly approach the end of 2011 we are busy ensuring clients older than 70 ½ have met their Required Minimum Distribution (RMD) requirements. It’s also common for us to plan and facilitate charitable donations this time of year.
If you still need to take a Required Minimum Distribution and also would like to make some year-end charitable gifts, you have a unique consideration for 2011. Congress extended a provision that enables individuals age 70 ½ and older to give charities up to $100,000 tax-free directly from their individual retirement accounts (IRA).
Specific rules for this technique include:
- The distribution must go directly from the IRA custodian to the qualified charity.
- A married couple can each make a gift up to $100,000, but each spouse must be over 70 ½ and each must have their own IRA with sufficient funds on the date of the contribution.
- You do not get a charitable deduction on your tax return, but the IRA distribution is not included in your gross income. This can be beneficial to some folks, especially if you don’t itemize.
Additional rules apply, so please give us a call if you would like to consider this strategy. Time is of the essence though – so if you want to do this, let us know ASAP.