Saturday, January 7, 2012

IRA Charitable Rollover Expired on Dec. 31, 2011

Congress did not extend the IRA charitable rollover prior to Dec. 31, 2011, the date on which the rollover expired.  
In 2011, taxpayers age 70 ½ or older could make tax-free charitable gifts of up to $100,000 per year directly from their Individual Retirement Accounts to eligible charities, including colleges, universities and independent schools. I.R.C. 408(d)(8).  According to I.R.C. 408(d)(8)(F) that rollover expired at the end of 2011.
Earlier in 2011, Senators Charles Schumer (D-N.Y.) and Olympia Snowe (R-Maine) and U.S. Representatives Wally Herger (R-Calif.) and Earl Blumenauer (D-Ore.) introduced the Public Good IRA Rollover Act of 2011 (S. 557, H.R. 2502). The PGIRA would permanently extend and expand the IRA charitable rollover.  As of this writing, the PGIRA has yet to occur.  There is still a possibility that a short-term retroactive extension of the IRA charitable rollover will happen in 2012.
In the meantime, a taxpayer can still pull money out of an IRA as taxable income and receive a corresponding deduction for the amount given to the charity (assuming she meets the other criteria for deductibility).  Under pre-2012 law, the rollover to charity was neither taxable nor deductible.

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