UPDATE: On December 17, 2010, the President signed this bill into law, extending the IRA Charitable Rollover for 2010 & 2011. Read about doing this through Servant Foundation here.
As part of the ongoing tax debate in Washington, last night the Democrats in the Senate released The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, their version of the bill central to the debate over the extension of the Bush tax cuts. It includes a number of popular extenders that were not included in the House version, including the ability for some taxpayers to make gifts to charity from Individual Retirement Accounts (IRAs).
The provision, which originally expired on Dec. 31, 2009, allows taxpayers over age 70 1/2 to distribute gifts of up to $100,000 to charities from an IRA without paying taxes on the gifted amount. This helps retirees meet their minimum distribution requirements without boosting their incomes. If this new bill passes, this would be available until Dec. 31, 2011. Gifts made in January 2011 could also count towards 2010.
Political pundits expect the bill to meet little resistance in the Senate, but it may face difficulties in the House. Congressional Democrats, disgruntled over the President’s compromise with the Republicans, are expected to cause some delays.
Though donor advised funds do not qualify for IRA charitable distributions, Servant Foundation offers donors the ability to open “designated funds” to receive these gifts. Designated funds are similar to DAFs, but require the donor to name the recipient charity up front. The donor then advises Servant on the timing for sending grants out to the designated charity. Donors can establish multiple designated funds if a number of charities are intended as recipients.
For more information on designated funds or questions on IRA distributions, contact Jonathan at 913-538-7842 or firstname.lastname@example.org.