Window in January for Charitable Deductions to be Credited to 2012
Jorge Parrott, Missions Director
Here is an opportunity to consider for this tax season. The so-called “fiscal cliff” law just passed by Congress and signed by President Obama, formally known as the “American Taxpayer Relief Act” (the Act), includes a little-publicized provision providing a very short window of opportunity for eligible taxpayers to make direct charitable distributions from their IRAs in January of 2013 and count them as made on December 31, 2012.
The Act also contains a relief provision for eligible taxpayers who took distributions from their IRAs in December of 2012 (not knowing that the direct charitable IRA distribution exclusion would be retroactively renewed). The Act allows those taxpayers to exclude those distributions from their taxable income (within the prescribed limits) so long as they transfer the distributed funds to a qualified charity by the end of January 2013.
These rules relate to the fact that the Act re-extends through 2013 the exclusion for direct charitable IRA distributions by taxpayers 70½ years old and older. That exclusion had expired as of December 31, 2011. The renewal is retroactive and covers 2012.
Given the fact that the renewal of the provision did not occur until January of 2013, Congress is allowing taxpayers a temporary window through January 31, 2013, during which taxpayers may make direct charitable IRA distributions (within the prescribed limits) and treat them as having been made on December 31, 2012. Please check with your financial advisor about more details.
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(Taken from: Evangelism Explosion International. Dr. John B. Sorensen John Sorensen President
© Evangelism Explosion International, All Rights Reserved.)
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