The Community Foundation of the Eastern Shore is pleased to inform area donors and nonprofits that the recent extension of the Pension Protection Act provides a unique opportunity to holders of traditional and ROTH IRAs who are at least 70 ½ years old.
On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 into law, extending the provision allowing individuals to transfer their IRA assets directly to charity without recognizing those assets as income.
In 2012 and 2013, holders of traditional and Roth IRAs who are at least 70 ½ years old can make direct charitable transfers up to $100,000 per year. As a qualified public charity, the Community Foundation of the Eastern Shore can help donors execute the transfers and choose from several charitable fund options for their gift. Donor Advised Funds do not qualify for tax-free IRA transfers.
Additionally, the extension allows donors to make contributions directly to eligible charities before February 1, 2013, and elect to have such distributions treated as qualified charitable distributions in 2012. Recognizing that the extension of the IRA charitable rollover provision occurred in 2013, this change may be a particular benefit to donors who would like to take advantage of the rollover in both 2012 and 2013.
This is good news for Americans who make charitable contributions, but even better news for children and families who receive services form nonprofit organizations that rely on these donations. Donors are urged to work with their professional advisers to determine the effect of these rules on their specific tax situation.
“This really is a limited-time offer. The window is open now, but it may close January 1, 2014,” said Wilson. “For anyone interested in establishing a permanent legacy in this community, this is an opportunity to make the gift of a lifetime.”
Tax-free Alternatives for IRA Charitable Rollovers:
The federal law extension allows IRA owners to transfer gifts to charity tax-free, but generous IRA donors still face multiple options for their gift. Here are four types of charitable funds at the Community Foundation that qualify for tax-free transfers from IRAs:
- Community Needs Funds: Meeting urgent and ever-changing needs in our community.
- Field of Interest Funds: Connecting personal values to high-impact opportunities.
- Designated Funds: Helping local nonprofit organizations succeed and grow.
- Scholarship Funds: Helping young people in our community fulfill their dreams.