Good News about IRA Charitable Rollover Gifts

Monday, January 14, 2013

Congress passed the “American Taxpayer Relief Act of 2012” on January 1, 2013, and, with this legislation, comes good news for alumni seeking to make charitable contributions to the College of Law from their IRAs.

Three Provisions for Charitable Rollover Gifts 

  • If you are 70 ½ or older and took a distribution from an IRA in December 2012 that did not comply with the “direct transfer to charity” requirement, you now have until January 31, 2013 to make a charitable rollover gift that will satisfy all or part of your required minimum distribution for the 2012 tax year.
  • If you simply failed to make a direct transfer to charity in 2012, you also have until January 31, 2013 to make a charitable rollover gift for the 2012 tax year.
  • Congress extended the IRA charitable rollover provision for the 2013 tax year, so if you have already made your 2012 distribution, you can again make a tax-fee distribution of up to $100,000 from your IRA directly to a qualified charity, such as the College of Law Annual Fund.

We hope that as you make your charitable rollover gift plans, you will include the College of Law in those plans.

Below you will find more information to help you as you make your plans. If you have any further questions or if we can help in any way, please call us at (217) 333-2628

Making Your Gifts

For Distributions Received in December 2012

You can make a cash contribution of any portion of the distribution received to one or more eligible charities, up to $100,000, by January 31, 2012. The cash gift should be made directly to the charity. When making this gift, you should explicitly state that the gift is intended to be a qualifying gift from the IRA. The charity will then send you the appropriate acknowledgement.

For Gifts Made in January, 2013 for 2012 Tax Year

Gifts made in January 2013 should be made through the normal IRA charitable rollover process as outlined by your IRA. You will authorize your IRA administrator to make the transfer direction from your IRA to the charity. As a reminder, these gifts must be made by January 31, 2013 in order to be eligible for the 2012 tax year. 

For Gifts Made in 2013

Gifts made during 2013 should be made through the normal charitable rollover process as outlined by your IRA. You will authorize your IRA administrator to make the transfer direction from your IRA to the charity. You have the entire year of 2013 to make IRA charitable rollover gifts from your IRA to a charity.

Requirements and Restrictions for Making IRA Charitable Rollover Gifts

  • Donor must be 70 ½ or older
  • Gift must be made directly from the IRA to an eligible charitable organization in 2013 (see above for 2012 exceptions)
  • Gifts to all charities combined cannot exceed a total of $100,000 for the 2013 tax year
  • All gifts must be outright. Transfers for a gift annuity, charitable remainder trust, or pooled income fund are not permitted.
  • Gifts cannot be made to a donor-advised fund, supporting organization, or private foundation.
  • The gift cannot be made from 401(k), 403(b) or 457 plans. Only IRAs are eligible.

If you have questions about how to make gifts to the College of Law, call us at (217) 333-2628.