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Guest Blog: Charitable Donations from IRAs for 2012 and 2013

This weeks installment is a guest blog from Wade Chessman of Chessman Wealth Strategies.

The American taxpayer relief act of 2012 extended qualified charitable distribution (QCD) provisions for 2012 2013.

A qualified charitable distribution is an otherwise taxable distribution from an IRA owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. An IRA owner can exclude from gross income up to $100,000 of a  QCD made for a year, and a QCD can be used to satisfy any IRA required minimum distributions (RMDs) for the year. Also, the amount of a QCD excluded from gross income is not taken into account in determining any deduction for charitable contributions.

2012 QCDs Made in January 2013

Special rules apply  to regular IRA distributions that were taken in December of 2012.  Clients who took a regular distribution in 2012 from their IRA can treat it as a QCD for 2012 if the following conditions are met:

  • Part or all of the distribution must be transferred to a qualifying charity in cash after the date of the December distribution and before February 1, 2013.
  • All QCD rules must be met with the exception of the December 2012 distribution being paid directly to the client instead of the charity.
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