There’s Still Time to Donate That IRA to Charity

The recent “fiscal cliff” tax deal granted IRA owners aged 70-1/2 or more an extension to January 31, 2013 to make tax free transfers to eligible charities, and treat such transfers as if they had been made in 2012.  Further, eligible IRA owners who received a distribution in December, 2012 can donate any portion of that distribution to a charity by January 31, and record the transaction in 2012!

Recall that folks age 70-1/2 or older have been able to make tax free distributions to a charity from an IRA, in amounts of up to $100,000 per year, and such distributions have not been subject to the charitable contribution percentage limits since they have not been includible in gross income, nor have they been included among the charitable contributions on Schedule A.

This provision was originally scheduled to expire for tax years beginning after December 31, 2011, though it was extended to apply to the 2012 tax year, and has now been further extended for charitable transfers made in tax years beginning before January 1, 2014.