Contribution Strategy if Congress Delays Extending the IRA Gift Law
Qualified charitable distributions from IRAs should be the preferred method of charitable giving in 2012 for qualified individuals (IRA owners age 70½ and older) — assuming Congress extends the law for another year. Direct IRA gifts are attractive because they satisfy part or all of an IRA owner’s required minimum distribution, which reduces taxable income without the need to itemize. These gifts also may alleviate certain tax penalties and restrictions.
Unfortunately, 2012 is an election year, and (as has happened in past years) Congress may not be able to agree on a tax bill until after November, perhaps in a lame duck session. For donors who itemize their deductions, a good strategy might be to instruct your IRA custodian to make a direct gift from your account, up to your 2012 required minimum distribution. If Congress should fail to renew the IRA provision, you would be taxable on a minimum distribution but could then take a charitable contribution deduction that avoids tax. If Congress does extend the law, then your IRA charitable distribution would not be taxable income to you or anyone else. Please call our office if you decide to make an IRA gift in 2012.
Copyright © by R&R Newkirk. All rights reserved.
Unfortunately, 2012 is an election year, and (as has happened in past years) Congress may not be able to agree on a tax bill until after November, perhaps in a lame duck session. For donors who itemize their deductions, a good strategy might be to instruct your IRA custodian to make a direct gift from your account, up to your 2012 required minimum distribution. If Congress should fail to renew the IRA provision, you would be taxable on a minimum distribution but could then take a charitable contribution deduction that avoids tax. If Congress does extend the law, then your IRA charitable distribution would not be taxable income to you or anyone else. Please call our office if you decide to make an IRA gift in 2012.
Copyright © by R&R Newkirk. All rights reserved.
