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American Taxpayer Relief Act

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Congress OKs IRA Gifts -
Through 2013

The American Taxpayer Relief Act of 2012, recently approved by Congress and signed into law by President Obama in early January, includes a provision for qualified charitable distributions by IRA owners ages 70-1/2 and older, up to $100,000.

What does this mean to our supporters who qualify to make IRA gifts?

  • If you must take a required minimum distribution from your IRA in 2013, this new provision allows that you can direct your IRA custodian to make that distribution directly to The Leukemia & Lymphoma Society and other charitable organizations without adding to your 2013 income.
  • Qualified donors can make direct IRA gifts to charity up to $100,000 anytime in 2013 without recognizing income.
  • Non-itemizers might get a large boost from this law since they would not otherwise have the benefit of any charitable deductions when completing their income tax returns. Normal distributions from an IRA trigger reportable income for the accountholder, creating a higher tax obligation. Non-itemizers can direct gifts to their favorite charities, including The Leukemia & Lymphoma Society, and avoid the additional income.

Here are some important points to keep in mind about IRA gifts:

  • Charitable distributions are tax free in 2013 up to $100,000 and, better yet, 2013 gifts will satisfy part or all of the required minimum distributions IRA owners must take after age 70 1/2. That means income tax savings, even for donors who do not itemize their deductions.
  • Only the IRA custodian can transfer gift amounts to a qualified organization. If IRA owners withdraw funds and then contribute them to charity separately, amounts withdrawn will be taxable to the donor.
  • IRA donors need receipts of the same kind provided for other types of charitable contributions. It's important that donors coordinate IRA contributions with our office to ensure that appropriate documentation is provided.
  • Owners of "inherited" IRAs can make gifts (if they are over 70 1/2), but other retirement plans, such as pensions, 401(k) plans and others, are not eligible.
  • IRA gifts cannot be made to charitable remainder trusts or for charitable gift annuities.

We have a new booklet highlighting the charitable aspects of the new American Taxpayer Relief Act.  We would be pleased to send you a free copy without cost or obligation.  Please call us at 888-773-9958 or email us at legacy@lls.org for your copy.

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last updated on Wednesday, December 18, 2013
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