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Here We Go Again

For the second year in a row, the status of tax-free transfers from IRAs to charities is in doubt.  Late in 2014, Congress retroactively renewed legislation permitting IRA owners age 70½ and older to make gifts up to $100,000 directly to charities – but only for 2014.  It is expected that legislation will be introduced in 2015 to renew qualified charitable distributions for 2015 – and possibly even make the law permanent.

Should you make a 2015 gift from your IRA early in the year or wait until legislation has passed?  There’s little downside to having your IRA custodian send a check directly to charity, provided you normally itemize your income tax deductions.  You should also limit your gift to the amount of your 2015 required minimum distribution (you can always make a second gift later).  If the IRA legislation is renewed later in 2015, gifts made earlier in the year will qualify for tax-free treatment.  If the law is not extended, you’ll owe the tax you would normally owe on a distribution, but you’ll be entitled to an income tax charitable deduction.

Check with your financial adviser about making your gifts early in 2015.  Call us if you have questions about the status of the law.  And please notify us if you plan to make a gift from your IRA so that we may provide the proper substantiation.

 

Please contact us for more information.

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