As you have probably heard, Congress passed The American Taxpayer Relief Act of 2012 on January 1, 2013. The bill resolved the “fiscal cliff” and includes a few helpful provisions for donors who want to make charitable gifts.
If you are age 70½ or older, you can transfer up to $100,000 from your IRA directly to Arkansas Children's Hospital without having to pay income taxes on that money. Due to the late extension of the law, Congress provided two special transition rules:
- Qualified charitable distributions made before February 1, 2013 may be counted retroactively for the 2012 tax year.
- A taxpayer who took a distribution from an IRA in December 2012 may make a contribution to a qualified charity before February 1, 2013 and treat this as a direct transfer.
With these special rules in effect, a generous individual can make two qualified charitable contributions up to $100,000 each in 2013 – one by January 31, 2013 for the 2012 tax year and another anytime between February 1, 2013 and December 31, 2013 for the 2013 tax year.
As an extra benefit, these distributions can count towards the IRA’s required minimum distribution and do not show up on your 1040 form as part of your gross income.
If you want to take advantage of these special rules, you have to make your transfer before February 1st.
The deadline is quickly approaching. If you’re interested in taking advantage of this limited opportunity, contact Melissa Stiles at 501-364-5308 or firstname.lastname@example.org for more information.
To learn more about planned giving at Arkansas Children’s Hospital, give us a call or request more information