Posted on January 8, 2013

IRA Charitable Rollover Reinstated

With the IRA charitable rollover provision reinstated as part of the recently passed American Taxpayer Relief Act of 2012, older donors will not be required to count as taxable income transfers of up to $100,000 from their individual retirement account to qualified nonprofits, the Wall Street Journal reports.

Under the law, which had expired in 2011, investors age 70-and-a-half or older can take advantage of the rule through the end of the month and have it count toward their 2012 return, while those who took a mandatory distribution in December 2012 and donate that money to charity will not be subjected to tax on the distribution.

According to the Journal, nonprofit organizations lobbied hard to have the provision reinstated. And in a statement on its Web site, Independent Sector commended policy makers for reinstating the provision. "We are...heartened that the [American Taxpayer Relief Act] does not provide any direct limitations on the charitable deduction and that key giving incentives, including the IRA charitable rollover, as well as enhanced deductions for the donation of food and land for conservation purposes have been reinstated and extended through the end of 2013," said IS. "The compromise between parties resulted in modest improvements to the federal estate tax, though not at the 2009 levels IS has supported."