E-Alert
January 21, 2011
Tax Free Distributions from IRAs to Qualified Charities
Under prior law, individuals age 70 1/2 or older could distribute up to $100,000 per year from their IRA to one or more qualified charities. The distribution was not included in the individual's gross income, but did count towards satisfying any required minimum distribution for the current year. This provision was extended by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
Further, the law contains a special provision permitting taxpayers to elect to have a qualified charitable distribution made in the month of January 2011 to be treated as if made on December 31, 2010. This allows more individuals to take advantage of the provision for 2010 or comply with their required minimum distribution requirements if they were inadvertently missed during 2010.
The IRS will prescribe the form and manner of making the election.
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If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.
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