Tax Relief Act for Charitable Contributions

The Tax Relief Act signed into law on Friday, December 17, resurrects the option to make charitable donations directly from an IRA. Please note:
• This change applies to 2010 and 2011 tax years
• IRA owners must be 70 ½+ (subject to Required Minimum Distributions, or RMDS)
• The transfer to the charity must come directly from the IRA
• The organization must be a public charity
• Up to $100,000 per year may be transferred to charity
• These charitable donations qualify for the RMD
• If the 2010 RMD has NOT yet been taken, the account owner has until January 31, 2011, to satisfy the 2010 RMD by contributing to a charity
• If the 2010 RMD has NOT yet been taken and the account owner is NOT planning to transfer funds to a charity, the RMD must be taken by December 31, 2010
• There is no way to “undo” a normal RMD that has already been made for 2010 in order to take advantage of the charitable transfer

As always, please consult with a qualified tax advisor regarding your own particular situation.