Individual Charitable Contribution Incentives
In 2009, individuals over the age of 70.5 were allowed to make tax-free charitable contributions of up to $100,000 per year, per taxpayer, from their retirement accounts. The contribution would not be subject to income tax and would count towards the individual’s required minimum distribution. This incentive had expired in 2010. Due to the 2010 Tax Relief Act, this provision was extended for two years through the end of 2011. Because the provision was enacted in the latter part of 2010, taxpayers are allowed to make charitable transfers during January 2011 as if they were made December 31, 2010. The Joint Committee on Taxation has not disclosed the separate cost of this provision.
This provision can be useful for those individuals who have charitable intentions and large IRAs. One thing not quite clear, however, is the impact that having a January 2011 distribution be treated as a December 2010 distribution. Watch for more assistance and discussion on the topic.
If you have any questions or would like more information, please contact Wood, Atter & Wolf, P.A., in Jacksonville and Ponte Vedra Beach, Florida.
