IRA Charitable Rollover extension continues in 2013


Church of the Brethren Newsline
January 10, 2013

From the Newsline editor:

Our thanks to Brethren Benefit Trust (BBT) staff Brian Solem for submitting this report to Newsline, with information provided by PGCalc.

Contact the Brethren Foundation if you would like to receive more information about the IRS requirements to document rollover gifts, when it becomes available. Contact 888-311-6530 (toll-free) or 847-695-0200 (local) or e-mail bfi@cobbt.org .

Contact the Church of the Brethren Donor Relations team for more information or help with giving a gift to the Church of the Brethren denomination: John R. Hipps at jhipps@brethren.org or Mandy Garcia at mgarcia@brethren.org .

Church members interested in supporting other Church of the Brethren-related agencies through the IRA charitable rollover are encouraged to contact those organizations directly. A directory of church agencies is available at www.brethren.org/about/directory.html .

By now many are aware that the IRA charitable rollover has been extended through the end of 2013. There are some special provisions this time that make it more complex. Read on to learn about the details of the law.

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The IRA charitable rollover has proven a popular way for donors to support their favorite causes. It enables donors to make a gift to charity from their IRA and not include the distributed amount in their taxable income. Beyond making it easier to make gifts from their IRA, this can be advantageous for donors from a tax standpoint if:

-- They do not itemize deductions.

-- They pay state income tax but cannot take charitable deductions on the state return.

-- They would not be able to deduct all of their charitable contributions because of deduction limitations.

-- An increase in taxable income may negatively impact their ability to use other deductions.


The extension keeps in place all of the previous requirements in order for the transfer to qualify:

-- The donor must be at least 70 1/2 years of age when the gift is made.

-- The transfer must be made directly from the IRA administrator to the charity.

-- The gifts from the IRA cannot exceed $100,000 per person or $200,000 for a couple in a given year.

-- They can only be outright gifts (they cannot fund a charitable gift annuity or charitable trust).

-- No goods or services can be given in exchange.

-- The gift cannot be made to a donor-advised fund or a supporting organization.


The law is retroactive and includes gifts in 2012 as well as 2013. This helps donors who made qualifying IRA distributions in 2012 in the hope that the provision would be extended. These donors need to make sure they get a receipt that has the required information for IRA charitable rollover gifts.


If donors did not make a qualifying gift in 2012 but would still like to, they can do so in one of two time-limited ways:

-- Make a 2012 IRA rollover in January 2013. A donor can do a rollover gift in January and elect to have this be considered made in 2012. There is a short window of opportunity for this--it must be made by the end of January. How the election is to be made will be specified by the secretary of the Treasury Department later this year (presumably before April 15!).

-- Convert a December 2012 IRA distribution into a 2012 IRA charitable rollover gift. Some donors waited to take their required minimum distributions until December, hoping that the IRA rollover would be extended for 2012. If that is the case, and the distribution meets all of the IRA rollover criteria except for the direct transfer to charity requirement, donors can now claim it as a charitable rollover gift in 2012, to the extent that they now transfer the distribution in cash to the qualifying organization.


This transfer from their bank account to the charitable organization must occur by Jan. 31, 2013.
If the donor took a distribution in December and made a gift to a qualifying organization in December, these two can be tied together, as long as the charitable distribution occurred after the withdrawal from the IRA.

It is not clear at this time what the Internal Revenue Service will require from the taxpayer (donor) to document this gift arrangement. Please contact the Brethren Foundation if you would like to receive this information when it becomes available.

This is great news for the not-for-profit community and its donors, and a good way to start the new year!

-- The above information was provided by PGCalc and submitted to Newsline by Brethren Benefit Trust staff Brian Solem.

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