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Charitable Gifts

If you are over 70 ½, have an IRA and plan to make charitable gifts, listen up!  The American Taxpayer Relief Act of 2012 (ATRA) extended the qualified charitable distribution (QCD) provisions for 2012 and 2013.  A QCD is a distribution from an IRA (excluding ongoing SEPs and SIMPLE IRAs) owned by someone who is 70½ or over that is paid directly from the IRA to a qualified charity.  Up to $100,000 in QCDs can be excluded from gross income per year and the QCD can also be used to satisfy IRA required minimum distributions (RMDs) for the year.

And it’s not too late for 2012 but you need to act quickly.  An IRA owner can treat a contribution made to a qualified charity in January 2013 as a 2012 QCD in either of the following circumstances:

•The contribution is a cash contribution to the charity of all or a portion of an IRA distribution made to the IRA owner in December 2012, provided that the contribution would have been a 2012 QCD if it had been paid directly from the IRA to the charity in 2012.

•The contribution is paid directly from the IRA to the charity, provided that the contribution would have been a 2012 QCD if it had been paid in 2012.

A QCD made in January 2013 that is treated as a 2012 QCD will satisfy the IRA owner’s unmade 2012 RMD if the amount of the QCD equals or exceeds the 2012 RMD. However, no part of such a QCD can be used to satisfy the 2013 RMD, even if the 2012 RMD had already been made. In determining the RMD for 2013, the 2012 QCD must be subtracted from the December 31, 2012, IRA account balance(s).

Contact our office if you would like more information regarding QCDs.

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Form ADV Part 2A

Form CRS