BUZ LIVINGSTON: Charitable IRA Rollovers - Plan Now

Published: Sunday, March 17, 2013 at 11:22 AM.

Ken, here are your bullet points. If you are required to take RMDs simply name a 501(c)(3) charity as alternate beneficiary.  Each custodian likely has a different protocol and most will require additional verification either as a signature guarantee or notarization.  

By giving directly from your IRA, as opposed to personally, allows the use of pre-tax dollars versus after-tax. Charitable IRA rollovers are more tax-efficient than itemized deductions; run it by your CPA. Most people don’t itemize and gain no tax advantage for charitable gifts. Charitable IRA rollovers allow a way to give and realize a tax benefit for non-itemizers.

If Congress limits itemized deductions for high earners, charitable IRA rollovers provide donors an alternative where the charity still benefits while maintaining their tax preferences for gifts.

Charitable IRA rollovers have a $100,000 limit and regulations prohibit charitable IRA rollovers to donor advised funds.  While charities are required to acknowledge the gift, the donee cannot claim the rollover as an itemized deduction.  Custodians can impose specific minimum withdrawal amounts or any restriction. Like all charitable donations, donees cannot receive material benefit.  Given the added complexity don’t delay sending paperwork.

It’s never too early to plan; remember charitable IRA rollovers sunset Jan. 1, 2014.

Buz Livingston, CFP, offers hourly financial planning and fee-only investment management to clients along Florida’s Emerald Coast. He can be reached at 267-1068, Buz@LivingstonFinancial.netor www.LivingstonFinancial.net.


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