Thursday, January 24, 2013
As I have previously discussed, the American Taxpayer Relief Act of 2012 maintained an old tax deduction that allows individuals who are 70 and a half years or older to exclude up to $100,000 of income. For a taxpayer, there are certain requirements that one has to meet.
- This exclusion only applies to IRA owners
- The taxpayer must directly transfer the donation from his or her IRA to a "qualified" charity as defined by Section 170(b)(1)(A). Under this option, the taxpayer is allowed to credit the amount that he or she transfers against the IRA's required minimum distribution.
- The absolute deadline to take this exclusion is January 31, 2013. If the taxpayer makes the transfer in this month, the taxpayer can elect to treat the rollover has occurring in 2012.
See Reminder: Still Time To Make 2012 Charitable IRA Rollover, Charitable Planning, Jan. 18, 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.