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Trusts and Estates


Charitable Giving Under the New Tax Law: A Unique (But Brief) Opportunity for IRA Rollovers and Other Highlights

January 2013

The American Taxpayer Relief Act of 2012 enacted in Washington last week creates a unique opportunity for charitable giving. Individuals with IRAs who have attained age 70½ may make a tax-free rollover to charity of up to $200,000, if they act during January 2013.

Here’s how it works. The new law restores the ability of an individual who has attained age 70½ to make a tax-free IRA distribution (commonly referred to as a “rollover”) to charity of up to $100,000 during 2013. And if the individual acts during January 2013, he or she can rollover an additional $100,000 and have it treated as if it was rolled over in 2012 (a year in which the IRA charitable rollover had temporarily expired until the enactment of the new law). In addition, an individual who took a personal IRA distribution during December 2012 may be able to treat up to $100,000 of the distribution as a tax-free 2012 distribution to charity - to the extent the individual transfers up to $100,000 in cash to charity during January 2013. Therefore, individuals looking to “double up” on IRA charitable rollovers - and contribute up to $200,000 of IRA assets tax free to one or more charities - can do so if they act quickly.

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