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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Category Archives: Charitable IRA Rollover

    Will Charitable IRA Donations Be Back This Year For Families in Newport Beach, California?

    The charitable IRA rollover provision, which
    expired at the end of last year, allowed IRA owners ages 70½ or older to donate
    up to $100,000 of their IRA assets to a charity. The donor didn't receive a tax
    deduction for the contribution. But he or she didn't have to report the IRA
    withdrawal as taxable income, either. And the contribution could count toward
    the annual required minimum distribution, or RMD, that people 70½ or older must
    take from a traditional IRA.

    Cash and CoinsWhile taxes are uncertain for
    2013, you may be thinking Congress and the White House may retroactively extend
    some “expired” taxpayer favorites. For example, one that expired in 2011 is the
    ability to give the “required minimum distribution” (RMD) from your IRA to

    But do not count on retroactive
    resuscitation for this favorite in time for your 2012 taxes.

    Until the end of 2011, as you
    likely recall, it was possible for individuals over the age of 70 ½ to simply
    rollover their RMDs from their IRAs straight into the waiting hands of their
    favorite charity. As a result, this saved these taxpayers from any pesky
    taxable income.

    The Wall Street Journal took up this matter in a recent article
    titled “Should You Wait on IRA Donations?
    According to the article, aside from benefiting charity, the benefit to seniors
    making this savvy move include:

    “By reducing your adjusted gross income, the tax provision
    may help you keep it below the thresholds at which you could lose some of your
    deductions and other tax benefits, or become subject to higher Medicare
    premiums and taxes on your Social Security benefits.”

    The verdict: it might not be
    worth risking the wait on Congress and the White House to find out the official
    ruling on charitable IRA distributions for 2012.

    The article notes, however, that
    even if you have to take the RMD and accept the taxable income, you can still
    give it away and claim a charitable deduction. Although that’s not as
    beneficial as the Charitable IRA rollover, it’s better than nothing and
    certainly far better than inaction. Why? There’s an excise tax on the failure
    to timely accept the full amount of your RMD.

    Contact your Newport Beach, California Estate Planning Attorneys at Meier Law Firm to discuss estate planning for your family.

    ReferenceThe Wall Street Journal (September 22, 2012) “Should You Wait on IRA Donations?

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